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1.4 Moral Standards and the All-round Development of the Person |
In trying for a deeper understanding of regulation by custom and morality we could start by discussing the monotonization of life, something caused by industrialization, a process that every developed country has gone through. Industrialization brings with it more in the way of material goods, but brings greater monotony to people's lives. This has been an important topic for many economists in recent years. For example, in
Democratic Ideals and Reality
, Halford J. Mackinder asked: What are the toxins of modern industrial life? In his view it was the monotony of work, boring social life and the monotony of the boring collective life. He thought it no wonder that the British bet on football matches in order to escape the monotony of their reality.
Mackinder compared pre-and post-industrialization Europe to the effect that: In ancient Greece and medieval Europe, social organization was fragmented, but every town of a certain size had considerable scope to develop. In Florence, people shaking hands in its streets or people related by marriage, were actually rival masters in the same industry or competing merchants on the same exchange. A young and talented Florentine did not need to pursue a career in some faraway capital since he had many choices to work for and within his own city. He could be the mayor, the prime minister, a general or a commanding officer; he might lead an army to war, a small-scale one admittedly but big enough to call on all his mental resources and his leadership skills. If he were a painter, sculptor or architect, he might be given sole responsibility for designing a commemorative building in the city, rather than watch the work go to a big name architect from elsewhere.
In the end, Mackinder says regretfully: Of course no one suggests that you should or could return to institutions on the Athenian or Florentine scale, but the fact remains that you have drained your local life of most of its value and interest by the development of nationwide class organization…If you pursue relentlessly the idols of efficiency and cheapness, you will give us a world in which the young will never see life but only an aspect of life…
We cannot say for sure whether urban life in ancient Greece or medieval Europe was truly so humanistic and full of variety, but what is certainly true is that post-industrialization urban life was as monotonous as Mackinder asserted. If technological progress and automated production are inevitable, it is also inevitable that workers become more and more tightly fettered to assembly lines. As a result, their feelings of boredom, depression and apathy will get worse. Since an industrialized country has no way to revert to a pre-industrial society, the sense of depression can only increase.
Here comes a question of practical significance: With technology advancement and social progress, the content of man's foremost needs will expand. When essential material goods are in short supply, man's foremost needs are food, clothes and shelter. But once these material essentials are adequate, man will seek self-development including the need for a spiritual life being met, and these should count as basic needs too. A society is seriously defective if it possesses material but not spiritual wealth, or if it can satisfy material but not spiritual needs. The two kinds of needs are closely connected. Once material needs are met, people will have spiritual needs that they hope to satisfy. The meeting of spiritual needs will further develop material production, which in turn will engender higher spiritual needs. Through the interaction and mutual promotion of the two needs, people will develop in an all-round way rather than partially.
The monotony of post-industrialization life can only be overcome by meeting material and spiritual needs. But the questions do not stop there. How can we ensure that both are met? Can we rely solely on economic growth to do so? Will economic growth inevitably result in fully rounded people? Once one form of monotonous living is overcome will it not be replaced by another? What should we focus on in order to avoid the re-emergence of monotony? These questions all merit exploration. Let us now analyze the relations between morality, belief and the all-round development of people.
What is meant by all-round development of the person? Scholars have yet to reach a conclusive answer. However, no matter what the differences of opinion, there is at least some consensus regarding the premise of this concept. There are three points.
Firstly, the all-round development of people should be based on productivity being developed to a high level. Without this, there will be insufficient supply of material goods and thus the material conditions necessary for all-round development of people and for satisfying their material and spiritual life needs will be absent. At the same time, a sufficiency of free time is also necessary for such development, but there has to be higher productivity before working hours can be cut or annual leave increased.
Secondly, such development should be based on a certain level of education. Without this, a person's material needs may not be met, let alone his spiritual life needs. If the average educational level in a society is low, this will severely limit the development of productivity in that society; consequently, neither material nor spiritual needs can be met and all-round development of people becomes impossible.
Thirdly, such development should be based on a certain belief and level of morality. A society without morality and belief cannot help its members realize all-round development even if its productivity is high and can provide material products in abundance. In such a corrupt atmosphere people will dissemble, cheat and jostle for advantage in order to be spared difficulty and people's all-round development becomes a pipe dream. Furthermore, these negative elements will surely undermine public security, people will feel unsafe and talk of personal development will be pointless.
Not one of the three points of the premise is dispensable. Highly developed productivity, better education, and good morals and customs are all essential to it. The all-round development of the person means one should not only be equipped with knowledge but also be a person of virtue. No matter what interpretation is put on "all-round development of the person," education and morality are unquestionably components of the premise.
I wrote in my book
System, Targets and People: Challenges Facing Economics
: "People always aspire to improve their lives. In the process of improving it, they increasingly sense that their individual improvement is connected to the improved lives of those around them.… Even if one person's life improves, but that of others does not or actually deteriorates and the social environment becomes more unstable than before, then it's hard to say that life quality overall shows improvement."
This passage actually pertains to the connection between moral standards and interpersonal relations, as well as to the understanding of "all-round development of the person."
Morality as a norm is both a power to encourage or constrain individuals and also a principle to be followed in handling relations between people. Everyone hopes his life can improve, i.e. that his material and spiritual needs can be satisfied. However, if his environment lacks a good moral ethos, if those around him do not trust each other, lack a sense of security or have a worsening life situation, then his aspiration cannot become reality. If he alone is well fed, well clothed and well housed, can this really be called a better quality of life? Sadly, the conclusion must be this: In a society without a good moral environment or moral standards it can hardly be said that he is more blessed or that his life quality has improved.
The all-round development of people needs a normal environment, at least in the opinion of the majority. In an anomic society where people must lie to survive, can they be carefree and happy even if they do have food, clothes and shelters? Can their quality of life improve? To understand the concept of all-round development it is crucial to know that an individual is inseparable from a group, from the people around and from the social environment in which he lives and grows. This awareness helps in understanding the role of morality in the all-round development of people.
The all-round development of people relies on the formation of a fine social ethos and for this to take place there must be moral constraints on individual and group behaviors. As mentioned above, without necessary moral constraints society and economy will fall into disorder and the social ethos will be poor. From an economic operation perspective, if a behavioral agent does not have moral constraints and if there is no mutual moral constraint between agents, the behavior will be short-term oriented, since the agents will anticipate lack of stability and thus lose confidence in the prospects for the economy.
The term "behavioral agent" here covers a very wide range and variety of people: investors reluctant to invest, short-sighted consumers, staff uncertain of the future who just muddle along without initiative or enthusiasm, students unwilling to study hard because of an uncertain future. All are illustrative of anticipated disorder. Granted, there are various reasons for this but there is no denying that lack of moral constraint and an unhealthy social atmosphere number amongst them. The resulting short-termism will distort resource allocation and bring down resource utilization efficiency. Therefore, through regulation by moral force, by establishing moral standards and by fostering a fine social ethos the agents' behavior will be normalized, thereby preventing the emergence of anticipated disorder and short-termism.
Social ethos, visibly or invisibly, guides people in the forming of their beliefs and this guidance is especially important in market economy. Where both the market mechanism and government sectors exert regulation, there are at least two types of guidance on enterprises and individuals: guidance by market and guidance by government. The former can be summed up as profit-led, with "economic man" as its premise, since "economic man" will do all in his power to seek maximum personal profit at the minimum cost. Governmental guidance can be summed up as target-led, although it too can be profit-led sometimes. That is to say, when governmental guidance operates, it too takes "economic man" as its premise. Since man as "economic man" aims for maximum personal profit and minimum loss, the government can take measures to guide people in the direction the government wants them to take. In this way the individual's interest can be guaranteed and government targets reached. As for an individual, he will always approach things from the angle of cost and profit. If he does not act in accordance with government policies he will pay more and get less, but if he does he will get more and pay less. In this sense, government's guidance can help individuals to achieve a healthy combination of target and profit.
Man is not just "economic man." He is also "social man." Government should ensure people understand what is worth doing and what is not, what should they strive for and what they should not. It amounts to guidance of people's belief but is expressed in the target-led guidance of government. Predominantly by means of education, government manages to get people to see the achievement of government's targets as their own belief. In regulation by government, there is no possibility of belief orientation that is divorced from government targets. But actually, belief orientation can stand alone: this is the task of regulation by moral force. Independent belief orientation is exercised by the individual or a group formed of individuals. However, since individual or group targets are not those of the government, the individual or group belief orientation is different from that of government. For example, adherence to a particular religion may provide a belief orientation, but that orientation can also be independent of religion. Also, adhering to a principle of how to treat others can provide a belief orientation, and this too can be independent.
In the formation of a fine social ethos, the belief orientations of government, of an individual or of a group are often mutually potentiating. Social ethos has an influence on people, helping them develop, strengthen or change their belief, whereas belief orientation can play a positive role in fostering a fine social ethos and thereby further influences the allocation of society's resources. A clear illustration of this is the influence of social ethos on consumer behavior, and the changes in consumer spending and structure in turn influence resource allocation. This is because consumption has a demonstration effect, an effect that is by nature a social one. What society does or does not uphold can find reflection in consumer behavior. For instance, extravagance is a form of irrational consumption that may have a negative impact on the social ethos, since it may exceed one's income or financial capability, or it may excessively take up resources, causing limited resources be used in an irrational way. To take another example: There are often undesirable spending customs in less developed societies that people feel obliged to follow. Cases in point include the staggering outlay on extravagant funerals, building expensive tombs even during the lifetime of the intended occupant, expensive betrothal gifts from the groom's family, preparing costly dowries, lavish wedding banquets, etc. Such undesirable consumption customs reflect a backward culture. But it is difficult for poor families to resist the invisible pressure exerted by customs; hence the consumption behavior thus formed has a detrimental effect on resource allocation.
Another illustration is that a fine social ethos has a positive influence on the caliber of citizenry and efficiency and that improvement here will in turn have a positive influence on resource allocation. Raising the caliber of the people—in education, health, mentality, morality—can also have a positive impact. History makes abundantly clear, when a country is in transition towards the developed state it should be alert to the possibility of social problems that can occur pursuant to achieving economic development and take measures to nip them in the bud. One such problem is how, in the context of ever higher incomes and ever more abundant material goods, to make people's lives more colorful and meaningful. An advanced society cannot be materially rich but spiritually void: it should meet all material, spiritual and self-development needs. The social ethos should not be allowed to slide downhill, but should be directed towards better and healthier development. And this is where regulation by morality comes in.
A society undergoes constant change during its progress from non-developed to developed condition. But one must not confuse social changes with acceptance of those changes by members of society. They are two different things―a distinction between human society and the natural world. Changes in the natural world can be observed and understood by human beings and they can discover the laws behind such changes, but nature will not change its laws as the result of such knowledge. Human society is different. Society's activities are people's activities and through them they come to understand that society. They can not only observe and understand social changes but also adjust their behaviors to adapt to those changes. They can also take measures to change society. That is to say, human beings and society are mutually influential and adaptive: In adjusting, societies advance and in adapting men develop. In this interaction, the influence of social ethos on social development and on people's self-development is revealed. On the one hand, a fine social ethos helps people to a correct understanding of social change and to timely adjustment of behavior. On the other hand, when there is a fine social ethos, people's behaviors are more conforming and their understanding improves, which is helpful in tackling problems that emerge as society develops.
Undoubtedly, the creation and nurturing of a fine social ethos is a much tougher job than managing or building culture in an enterprise or community. Even at the surface level, in creating a fine social ethos there are no hard targets to meet, nor are there obvious reliable indicators for evaluating whether or not that ethos has been created. That is to say, the fine social ethos concept is an elastic one. However, on further analysis, we will find it does follow certain rules: The higher people's educational and moral level, the better they love life, care about others and support public welfare, and the easier it is to foster and promote a fine social ethos. It is true that effective management or culture building of an enterprise or community can help foster a fine social ethos, but they cannot replace the joint efforts of society at large to enhance the national caliber and foster such an ethos.
People's self-development, the fostering and promoting of a fine social ethos are mutually complementary. The higher the level of man's pursuit, the stronger his sense of social responsibility will be. Such dedication to the public interest will have a beneficial role model effect and help foster and promote a fine social ethos.
Here we need to clear away a misconception, namely the supposition that if a society is economically underdeveloped, people's self-development and caliber improvement will be constrained and it therefore follows that there is no fine social ethos to foster and promote. The reason that this is wrong is because it treats as an absolute the relationship between the degree of economic development and the fostering and promotion of a social ethos, as if a developed economy is the sole factor bearing on the latter. In actual fact, in some very underdeveloped areas (including the underdeveloped stage common to every nation in history) or even in comparatively poor remote villages in developed countries, the social ethos can be a very good one. In general, the correlation between ethos and economy is rather complex and deserves further research before coming to any conclusions.
But history also demonstrates that the corruption of a country or area often sets in during the transition stage from economic underdevelopment towards developed state. In such a period, the impact of external influences, both good and bad, begins to increase. Moreover, because old social organizations or structures are falling apart and new ones are taking shape and there may be a long period of dividing and re-forming, then social usage and customs, people's mental attitudes, social values and standards will inevitably undergo some changes, drastic changes even. The question of whether the social climate is heading in a good or bad direction involves how we evaluate the changes. If we look at these changes through the prism of the original social structures, values or customs, we may find nothing positive about them. However, if we look at the changes from a different perspective, from the angle of the tobe-reached state of social development, our perception might be reversed and all will seem positive. To speak objectively, in the transitional period, the two trends co-exist, except that negative changes are more easily perceived, and therefore more likely to be discussed and cause dissatisfaction. This situation tends to persist for quite a long time and may not turn for the better until the economy develops, average income rises and national caliber improves. In this process, pure economic growth is not enough: the role of education and culture building cannot be neglected since they will have a positive influence on people's self-development, thereby helping mitigate changes for the worse in the social environment or even prevent such changes.
It's necessary to point out the relation between two works of Adam Smith:
An Inquiry into the Nature and Causes of the Wealth of Nations
and
The Theory of Moral Sentiments
. In my book
The Birth and Development of Macroeconomics
(1997) I wrote: "In his books
The Theory of Moral Sentiments
(1759) and
An Inquiry into the Nature and Causes of the Wealth of Nations
(1776), Adam Smith used the term 'invisible hand.' What he really meant was: A good social order that promotes the public good can be the spontaneous and unintended consequence of human behavior."
In fact, the "invisible hand" in
Wealth of Nations
mainly refers to regulation by market, whereas in
The Theory of Moral Sentiments
it encompasses the role of the law of market and the role of moral sentiments. In the history of economic thinking, the idea of "invisible hand" first appeared in
The Fable of the Bees
(1714), a book written by the Dutch philosopher Bernard Mandeville.
Mandeville put forward a proposition that is indicated in the book's subtitle:
Private Vices, Publick Benefits
. In his opinion, individual greed and selfish behavior promote social prosperity and if people abandon their vices and live a poor and simple life, it will spell desolation for society. Adam Smith did not agree. In his opinion, the notion that private vices could create public benefits was an ultra-egotistic and unbridled system. Man, in Smith's view, is more than "economic man" seeking only private benefits. Instead, he must follow rules, respect the interests of others and have a sympathetic heart. Professor Zhao Xiuyi has made a thorough explanation of this point. He points out that Adam Smith's system "affirmed the rationality of people pursuing private interest and well-being on the one hand; on the other, it stressed that such pursuit must be proper, i.e. it must conform to general social rules, and not be intemperate and greedy."
Then how did Adam Smith integrate his two books into his theory? According to Zhao's analysis, "Smith's desire was that a country and people's enrichment by market force must rise in step with the maintaining and promoting of morals."
In my opinion, Zhao's analysis is both true to Smith's true meaning and brings a fresh insight. Something deserving mention here is that, although Smith did not talk about government intervention functioning as the "visible hand," he always put great emphasis on the role of market rules and laws. In the traded sector, the consequences of violating laws and the consequences of offending moral standards were equally serious and equally not to be dismissed.