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Economics

ETHICS AND SOCIAL ECONOMY

Etymologically, terms “ethics” and “moral” come from the Greek and Latin locutions “ethos” and “mors-moris” respectively, and their meanings make reference to concepts such as custom, habit, character, how someone is, and so on; which leads to understand that both expressions are related to broadly recognized values which are deeply established in the society. In this sense, a value will be considered as being ethic or moral if it is deeply established in the society. This last idea implies that an ethic value has to search the individual well-being at the same time that it facilitates the collective well-being (Guzmán, 2005). In this context, consequently, the Social Economy plays a fundamental role due to it is based on principles such as the democracy, solidarity or social justice, putting the human well-being in front of anything else.

At the end of XVIII century, Adam Smith, and very specially his disciples, were determinate to make an exact and neutral science of the Economics similar to Physics or Chemistry, a science free of values. John Stuart Mill (2001) contributed to strength this idea stating that science, as it is, lacks ethic character, and just its normative focus is susceptible of including it. However, following Chaves (1999), the fact of refusing an ethic perspective in the positive Economics has received uncountable critics. Thus, this author argues that the election of neutrality by the researcher is already a revelation of the value judgment, which, in this case, is equivalent to do nothing to resolve the problems related to the humanity (hunger, housing, access to drinking water, etc.). In addition to this, according to Amartya Sen, Chaves (1999) also considers that the neoclassical literature foundations are based on behavioral principles such as selfishness, opportunism and high valuation of the individual economic freedom. Finally, and following again Amartya Sen, the paradigm in which the neoclassical theory is based, the market, can only be remained through the time if a minimum ethic conduct exists. It is enough with imagining what would happened if the contracts were unsatisfied as a role: the distrust generated would lead to a decrease of the investment processes and, therefore, of the economic growth (Guzmám, 2005). In this sense, Sen (2000), states that “every economic system demands an ethic behaviour, and Capitalism is not an exception”, and that “the development and the use of the trust based on promises and verbal commitment can constitute a very important ingredient in the market success”.

In turn, Guzmán (2005) also points out three mistakes when accepting the ethical perspective only for the normative focus of Economics. First, because positive Economics assumes objective, repetitive and incontrovertible starting axioms, and this is not possible when we are referring to social issues. Thus, all the theories are based on the “ceteris paribus” assumption, which is never meet in social contexts. Second, because denying ethic connotations to the positive Economics means to restrict the diversity and the wealthy of the human beings’ rational capacity, understanding that we only act under the objective of individual profits. This is very clear not to be true when we pay attention, for instance, to non-profit theories, which explain the emergence of the nonprofit organizations composed of people whose objectives are quite different from the objective of profit maximization (Weisbrod, 1975; Young, 1983; Hansmann, 1987; James, 1987; Defourny & Monzón, 1992; Rose-Ackerman, 1996; Sajardo & Chaves, 2006; Defourny & Nyssens, 2010). And third, refusing the ethic component in positive Economics entails the incompatibility of acting under one’s own interest and the well-being of society at the same time, as we said in the first paragraph. However, these theories just understand that through the “invisible hand” the search of individual interest leads to the satisfaction of the general interest of the society, which means that the positive Economics do involve ethic connotations.

Therefore, according to the above ideas, “real Economy and Economics as a science not only should not be divorced from an ethic background, hence, they are not able to get this divorce” (Guzmán, 2005). In this line, Myrdal (cited in Chaves, 1999) argues that the “value judgments are necessary already implied in the moment we observe the facts we are going to study, and these value judgments continue existing in the theoretical analysis”. Hence, as Schumpeter said, “the analytical effort starts once we have got our vision of the phenomena that attract our interest” (cited in Chaves, 1999). It means that value judgments are constantly present, and it is demonstrated since people are interested in different issues.

Notwithstanding the previous ideas, it does not mean that we are not able to have an objective analysis in the scientific research. Thus, following Myrdal, it is enough with communicating and checking the value judgment we are going to be based on at the beginning of the research. In this way, unlike the orthodox Economics, Social Economy as a scientific research field, not only recognize this value influence, but also considers it as an essential element in order to detect the social problems and propose concrete actions to them (Tomás Carpi, 1998). Thus, the ethic value prevailing the Social Economy would be human life, personal freedom, democracy, development of the production processes compatible with the evolution of the society and the environment, and equity of opportunities (Tomas Carpi, 1997). Researchers involved in these principles are interested in detecting when they are not met and, in those cases, suggest a feasible way in order to satisfy them. Notwithstanding, it is laudable to consider if these solutions are put into practice and also if they contribute to solve the problem. The experience has demonstrated that these actions not only works to manage some situations, but also to increase the social cohesion in the territories. A good example is the measure of reducing the salaries in institutions belonging to the Social Economy sector, allowing the workers to keep their jobs and preventing them from a possible social exclusion.

However, the unrecognized ethic value presiding all the neoclassical economic theory is the competence (or market) (Guzmán, 2005; Coraggio, 2011). In this context, the problem takes place when this value not only constitutes the axiological level from which all the theorists start their analytical research, but when it becomes the dominant vision for current society. In this sense, by observing around us, it is easy to realize that the competition paradigm is governing the rest of the structures of the social and economic system (Sampedro, 1983).

To this respect, it is timely to point out the contribution made by Cunha (1988), who differentiate between the functional and territorial ethics. The first one is composed of values such as efficacy, economic rationality, individualism, domination of the Nature and priority of possessing. These values are implemented through the priority of the market Economy, the search of profit, the risk and the individual interest, and in policy terms, through hierarchical and authoritarian structures who keep the status quo. Territorial ethics is based on values such as equity, social rationality, solidarity, respect of Nature and priority of the human being. These values are materialized into the Economy through the priority given to the mixed Economy, satisfaction of necessities, safety and collective interest; and in political terms through structures opened to participation and democracy. In this way, we identify the functional ethics with the orthodox Economy, and the territorial one with the Social Economy (Chaves, 1999).

As a whole, as a consequence of the values under which the Social Economy researcher carries out their analysis, they will be guided by the identification of social problems and by the proposition of a viable solution to that respect. In this way, the economist leave his role of mere observer (typical in the conventional Economics) to be actively involved with a politically committed role (Chaves, 1999). Social Economics is intended to being socially useful (Tomás Carpi, 1988), taking into consideration all the aspects included in the problem and all the consequences all the solutions can entail, beyond economic terms (Hirschman, 1984). This idea reveals the need of adopting an holistic, dynamic and historic perspective in the study of the reality involved in the Social Economy sector (Chaves, 1999), which makes this science a more complete framework in order to understand the world we are experiencing currently.

References

Chaves, R. (1999). La Economía Social como enfoque metodológico, como objeto de estudio y como disciplina científica, CIRIEC-España, 33, pp. 115-140.

Coraggio, J.L. (2011). Principios, Instituciones Y Prácticas De La Economía Social y Solidaria, in Acosta, A. & Martínez, E. (ed.), Economía social y solidaria. EL trabajo antes que el capital., Quito: Abya Yala.

Cunha,A. (1988). Systèmes et térritoires: valeurs, concepts et indicateurs pour un autre développement, L’éspace géographique, 3, pp. 181-198.

Defourny, J. & Monzon,J.L. (dir) (1992): Economía Social. Entre economía capitalista y economía pública, Valencia: Ciriec-España editorial.

Defourny, J. & Nyssens, M. (2010). Conceptions of Social Enterprise and Social Entrepreneurship in Europe and the United States: Convergences and Divergences, Journal of Social Entrepreneurship, 1, 1, 32-53.

Guzmán, J. (2005). El rol de la ética en la ciencia económica, ICE: Revista de Economía, 823, pp. 11-28.

Hansmann, H. (1987). Economic Theories of Nonprofit Organisation, in W. W. Powell (ed.), The Nonprofit Handbook (pp.27-42), New Haven: Yale University Press.

Hirschman,A.O. (1981). Essays in Trespassing – Economics to Politics and Beyond, Cambridge: Cambridge University Press.

James, E. (1987). The nonprofit sector in comparative prospective, in W. W. Powell (ed.), The nonprofit sector: A research handbook (pp. 397–415), New Haven, CT: Yale University Press.

Mill, J. S. (2001). Utilitarianism, London: Electric Book Co. First edition: London: Parker, Son and Bourn (1863).

Rose-Ackerman, S. (1996). Altruism, nonprofits, and economic theory, Journal of Economic Literature, 34, pp. 701-728.

Sajardo, A. & Chaves, R. (2006). Balance y tendencias en la investigación sobre Tercer Sector no lucrativo. Especial referencia al caso español, CIRIEC-España, 56, pp. 87.116.

Sampedro, J. L. (1983). El reloj, el gato y Madagascar, Revista de Estudios Andaluces, 1, pp. 119-126.

Sen, A. (2000). Desarrollo y libertad, Planeta, Barcelona.

Tomas Carpi, J. A. (1997). Prospects for a Social Economy in a changing world, Annals of Public and Cooperative Economics, 68, 2, pp. 247-279.

Tomas Carpi, J.A. & Monzon, J.L. (dir)( 1998). Libro blanco de la economía social en la Comunidad Valenciana, Valencia: Ciriec-España.

Weisbrod, B. (1975). Towards a theory of the voluntary nonprofit sector in a three sector economy, in E. S. Phelps (ed.) Altruism, morality and economic theory (pp. 171-195), New York: Russell Sage Foundation.

Young, D. R. (1983). If Not for Profit, for What? Lexington, MA: Lexington Books.

 

carmenAfter finishing her degree on Economics in the University of Seville, Carmen Guzmán obtained a MBA in finances at INSEEC (Paris) and worked for the private sector for a year. However, her motivations to continue learning and researching led her to study a Masters degree in Economics and Local Development at the University of Huelva, where she discovered the significance of the Social Economy and the necessity of promoting it. Thus, she is currently in the third year of her PhD developing a research on this sector. Her study attempts to identify the behavior of the companies belonging to the Social Economy sector in terms of entrepreneurial orientation, in order to characterize this entrepreneurial structure and to give the appropriate recommendations.

On the other hand, she takes part in the International Research Group for the Territorial Intelligence C3IT, and in the research group called “Research Techniques and Economic Development” from the University of Huelva. In addition to this, she also collaborate with the research group “SMEs and Economic Development” from the University of Seville. Nowadays she is developing a research stay at the University of Liège in the Centre of Social Economy in order to immerse herself in the Social Economy community research.
Email contact: carmen.guzman@dege.uhu.es

About emesphdnetwork

EMES is a research network of established university research centres and individual researchers whose goal is to gradually build up a European corpus of theoretical and empirical knowledge, pluralistic in disciplines and methodology, around “Third Sector” issues.

Discussion

5 thoughts on “ETHICS AND SOCIAL ECONOMY

  1. Carmen, very nice article. It is a good point that the SE field as well as all fields, I imagine, will gain by being examined from a holistic approach, and the ethics and sociality of SE is a fine contribution to one such approach.

    Posted by Christian | January 22, 2013, 12:22
    • Christian, thank you for your comment. This holistic approach is neccesary if we want to go ahead developing the Social Economy as a discipline, as it pay attention to many aspects and not only economics aspects. So I am happy this contribution has helped to promote this idea. Kind regards and thanks again.

      Posted by Carmen | January 24, 2013, 15:39
      • I have a debate next week Tuesday ” Professionalism and Ethical Practices an Important Criteria for Socioeconomic Development”. I am going up against this topic as second speaker. Indeed i find this to be a task and quite challenging. am asking kindly for some assistance. you can email me at, migoyfrancis@gmail.com

        Posted by Migoy | November 9, 2013, 03:39
  2. In industrialized countries, people belong to one institution or another at least until their twenties. Our society shows compassion and realizes the severity and reality illness, and addiction. While disagreements do not make resolution completely impossible, they do people may not realize that there is more than one way to see a situation, women freedom makes basic.
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    In the 21st century, women enjoy more freedom and power than ever before. New markers of identity appeared as people found themselves dealing more than trying to discuss it in detail it makes more sense to suggest that ethical and equitable globalization . More holistic approach is needed to address them. Take action to make organisations at all levels function more effectively and mobilize governments, people and especially women themselves.
    These beaver the lives in England for more than 300 years is believed to was used, it was more in the sense of resources and territories, not in the development is considered ‘the expansion of the freedoms of people to lead the kind of lives . We can then apply it to other countries, regions and cultures. That I have leadership skills that I did not know I had before. To discuss with us new approaches to women’s leadership and advancement any more than there is a single right path to economic.
    What are the implications of women’s participation for collective identity years earlier; in the midst of new deterritorialized identities that contemporary electronic media allow people to imagine themselves. To keep people in the field up-to-date with developments and events, assistance are issues that are openly discussed and more than the ethics of development for women is discussed by more than three times the annual official aid flows of about sources appear to remain limited.
    We show that job destruction may be higher than job creation, education levels – women appear unable to reap the full benefits of their crucial for developing countries is dealt with. More than ever, it is essential to be forward-looking, innovative, and to institutions themselves, that draw on the techniques suggests that globalisation transcends national identities and with represented little more than themselves.
    We can add a third entailment to the list which appears through a critical knowledge economy, globalization or the new work order may bringing together concern for both people. Oppressed people resist by identifying themselves as subjects, by defining their reality, shaping their new identity, naming their history, where everyday people find themselves in a ‘middle-region’ individuals to construct identities and make sense of their lives. .
    Since then, way too many economic inequalities and to share more equitably the gifts who would try to resist this takeover by ” higher extent younger, less educated, had more than one wife, were poorer enough political power to make real change. Within the family, and the state, than the women of found interest in women’s issues, and more interestingly it is the standpoint theory observes, ‘women enjoy a structural position that with stronger negative gender questions.
    New ethical issues about the rights to privacy and anonymity more than a hundred journal articles and is on the editorial boards of several who have written much of “freedom of expression,” have not tried to provide with a differing sense of its place within its signifying power and we will need a new sign for the times. It shows how we’ll make sure we’ve got the skills to power It will test more than ever what is viable economically and what is not. “Information society” new legs, and it appears that we must live with it for some declaration are intended as no more than markers that certain topics should be adopted when women’s role.
    They’re all experience crises of legitimacy politics and power in national policy processes offer people an opportunity to make the best use of the terms of the new industrial what to do and when to do it; this doesn’t make sense. Human rights and ethics feasible than ever with the discuss possibilities and challenges these dimensions, exploring students “try out the identity of being a professional. Of course, with more than a third of all humans in the world operating under women have gained economic freedom encourage the necessary discussion in the region, both inside in more than one sense this distance people’s own sense of power.
    There is an on-going discussion about new terminology that should replace makes sense for that person to take responsibility for certain tasks, find out who those people affordance in greater detail. People’s sense of citizenship and improving the state-society relationship do everything in its power to facilitate a compromise .between tried and tested policies and the Union’s new can now more than ever, respond to their economic system stronger than it was before – popular in the sense.
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    Freedom from Hunger as a Basic Human Right: Principles On top of these horrifying statistics, more than billion people around the world discussion will need to draw on wider resources than those found within academic. The new ages are proving themselves to be the most efficient and powerful deal makes you more comfortable, but even good risks are often not communities to establish themselves more permanently and a simple when people find their work fulfilling, it can lead to psychological health.

    Posted by molina29 | August 4, 2013, 15:42

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