Table Of ContentDipak Basu · Victoria Miroshnik
Ethics, Morality and
Business: The
Development of
Modern Economic
Systems, Volume II
Modern Civilizations
Ethics, Morality and Business: The Development
of Modern Economic Systems, Volume II
·
Dipak Basu Victoria Miroshnik
Ethics, Morality
and Business: The
Development
of Modern Economic
Systems, Volume II
Modern Civilizations
Dipak Basu Victoria Miroshnik
Nagasaki University Reitaku University
Nagasaki, Japan Chiba, Japan
ISBN 978-3-030-68066-4 ISBN 978-3-030-68067-1 (eBook)
https://doi.org/10.1007/978-3-030-68067-1
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
Nature Switzerland AG 2021
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and
retrieval,electronicadaptation,computersoftware,orbysimilarordissimilarmethodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc.
in this publication does not imply, even in the absence of a specific statement, that such
namesareexemptfromtherelevantprotectivelawsandregulationsandthereforefreefor
general use.
Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinforma-
tion in this book are believed to be true and accurate at the date of publication. Neither
the publisher nor the authors or the editors give a warranty, expressed or implied, with
respecttothematerialcontainedhereinorforanyerrorsoromissionsthatmayhavebeen
made.Thepublisherremainsneutralwithregardtojurisdictionalclaimsinpublishedmaps
and institutional affiliations.
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
This book is dedicated to our uncle
Nishith Ranjan Mitra, the Managing Director of the famous publishing
house of India,
Deb Sahitya Kuthir,
who has stimulated us always.
Introduction
In this book, we have analyzed the modern ideas of ethical dimensions
in economics and business. The modern battle is between capitalism
and socialism, in which capitalism is winning now, after the destruction
of the Soviet Union and the resultant demise of Yugoslavia, Venezuela,
Libya, and Syria. In this book, we have discussed the ethical dimensions
of this conflict. Ethical justifications for capitalism were supported by
AdamSmith,Bentham,JohnStuartMillinthenineteenthcenturyandby
Weber,Friedman,andStiglerinthetwentiethcentury.Socialismwasjusti-
fied by Marx and Engels in the nineteenth century, and Lenin, Bukharin,
Trotsky in the twentieth century.
In this book, we have analyzed these issues along with the ethical
management as demonstrated by Japanese corporations and in Scan-
dinavian countries where socialist characters are implemented within a
capitalist economy.
Corruptpeopleprohibitthedevelopmentofacountrybyusingpublic
resources for personal gains. The moral suggestion to solve this problem
is that one must work solely for common good. The corrupt people
have their rationality but from the moral point of view, it is not justi-
fied. However, capitalism gave its justification, as Friedman justified the
state power to protect the drug dealers. Adam Smith justified the self-
ishness of individual traders in terms of creating utility for the society
through the invisible hands of the market. Utilitarian, like Bentham or
vii
viii INTRODUCTION
John Stuart Mill, justified colonialism, as they were all directors of the
East India Company who colonized India.
Socialismjustifiedhumangoodsintermsofdevelopingandnourishing
essenceofhumannature.Inthatsense,MarxfollowedKautilya,Aristotle,
Aquinas, and Spinoza in his avocations of workers freedom in terms of
achieving human essence. Inequality of distribution of resources impedes
the perfection of both rich and poor. In that sense, Pareto Optimality is
animpedimentfortheproperredistributionofresourcesinanysociety,as
redistribution can affect the rich adversely although it benefits the poor.
Fromthesociety’spointofview,moralvaluescanbefullyrealizedonlyin
asocietyinwhicheachmemberisroughlyequalinpowerandstatuswith
the others. That was nearly achieved in the Soviet Union and Yugoslavia,
but both were destroyed because of human greed. Now Japan and Scan-
dinavian countries are trying to achieve that goal of a moral society by
reducing inequality.
If economics has to be useful, it should promote Rousseau’s idea of
a moral economy, in which the will of the society would prevail upon
the will of the individual. The challenge of the government should be
to enhance public and private welfare by creating conditions of equi-
tability and justice. That would create individuals into moral and respon-
sible subjects who would not be interested to accumulate fortune at the
expense of the people, which is the principle of the stock market led
economics.
Modern economics is now a useless economics, full of unnecessary
mathematicsandstatisticaltheories.Ithastoberescuedtoincludeuseful
mathematics and statistics to plan the economy to enhance morality in
socialandeconomicaffairs.Thatistheethicaldutyofthenewgenerations
of economists for whom this book is directed.
Contents
1 Ethics of Management 1
2 Ethics of Capitalism? 29
3 Marxist Ethics 57
4 Business Ethics and Ethical Leadership 95
5 Japanese Management System 139
6 Socialism in Yugoslavia and Sweden 173
Conclusion 193
Index 197
ix
List of Tables
Table 3.1 Analysis of economic growth rate (real GNP at 1987
price) 77
Table 3.2 Average growth rate in the EEC and CMEA (in % pa) 79
Table 3.3 Analysis of economic growth rates and labor productivity 80
Table 3.4 Investment ratio and investment efficiency 80
Table 3.5 A dynamic comparison of the Soviet and U.S. economies
(USSR as % of USA) 81
Table 3.6 USSR: growth rates of the GNP (av.annual rate) 81
Table 3.7 USSR: total trade, 1981–1990 (billion current U.S.
dollars) 88
Table 3.8 USSR: estimated hard currency balance of payments
(million current US dollars) 89
Table 3.9 USSR: estimated hard currency debt to the west (billion
current U.S. dollars) 90
Table 4.1 Ethical and unethical leadership The Ethical Leader 97
Table 4.2 Examples of final (personal and ethical–social) and
instrumental values (ethical–moral and values of
competition) 99
Table 4.3 Criteria for evaluation of ethical leadership 99
Table 5.1 Lean production system 142
xi
CHAPTER 1
Ethics of Management
There are two different views of ethics, as the discipline that deals with
morals. Ethics tries to describe the role morality plays in our everyday
lives, this is descriptive ethics. It may try to tell us what is morally right
and wrong. That is called normative ethics.
Descriptiveethicsraisesthequestionabouttheroleof“morality”actu-
ally plays in the actual economy. We may say that business has nothing to
do with morality. However, morality has important roles in the efficiency
of any economic system. In an exchange economy, if there is no trust in
transactions,therecannotbeanytransaction(Bowie2017;Abend2014).
Theconceptof“MoralEconomy”hasalonghistory.Itwasmentioned
by Kautilya, Aristotle, Cicero, and Jesus. In recent years, the concept was
elaborated by Polanyi (1957), Thompson (1963), Schumacher (1963),
Sayer (2000), and Bowles (2016). The idea is that a pure exchange
economy is immoral unless it would be accompanied by concerns for the
people, would create harmony in the society or Ji-Hi, as in the pre-Meiji
economy of Japan (Hiroike 1928; Horide 2009) or Maurya Dynasty and
Pala Dynasty in ancient and medieval India (Mazumdar 1917).
Thereareissuesthatcanundermineethicalnorms.Therecanbenepo-
tism, and favoritism, which discriminate against outsiders. There can be
bribery, which discriminates those who play by the rules and creates
an atmosphere of fraud. There can be cartels and price fixing in which
© The Author(s), under exclusive license to Springer Nature 1
Switzerland AG 2021
D. Basu and V. Miroshnik, Ethics, Morality and Business:
The Development of Modern Economic Systems, Volume II,
https://doi.org/10.1007/978-3-030-68067-1_1
