Religions, Economics and Ethics

Our contemporary globalized, modern world increasingly confronts issues in which ethical understanding is called into question.  Although some of these issues are often diverted into other discourses, it should be seen that the issues themselves are often ones where an ethical resolution is at stake.  Cloning, genetically designed organisms, the death penalty, abortions, animal rights, cultural and religious rights, and pre-emptive war are just a few of the most visible themes in which ethical understanding is asked to assist in decision making.

The argument of this paper is that the case of economics is also an ethical problem.  It would be argued that all economic ideologies must appeal to some form of social justice in order to be implemented and/or viable.  They achieve their goals by first standing on an ethical, philosophical, or social foundation, and often proceed under the perception that in the end, “it will be good for everyone.”

Furthermore, religion is here seen has an influential actor on economic understanding and behavior.  Individual consumerism is often affected by religious beliefs or by having no beliefs.  Generosity, partnership, exploitation, and “just” behavior, is to a certain extent defined by religious codes in many areas of the world.

Most of the world religions do have something to say about the economic behavior of humankind, and this is of course portrayed as an ethical issue of man in relation to man.  In this paper, there will be an overview of some of the world’s major religious traditions.  Mostly primary sources are used here for it is from these sources that most commentary and interpretation has arisen.

Finally there will be a short analysis of the role of religion and ethics in the contemporary globalized economy.



The Current Climate

The globalization of the world as we witness it today is not without its opponents.  This is largely due to the perception that the benefits of globalization are reserved mostly for the already powerful and wealthy.  The Zapatista uprising on the day of the signing of the NAFTA agreement, the protest activism of groups like ATTACK, civil protests against the G8 meetings in Seattle, Genoa, and Heiligedamm, as well as rhetoric from dissenting scholars, politicians, governments and religious groups have all pointed to social and economic injustices of the current globalized system.  Global terrorism, although poorly understood, may be another phenomenon which sees itself as fighting against the globalizing world, or fighting at least to achieve an alternative system.

The globalized economy of today is largely dominated by Neo-Liberal economic theories, which function in capitalistic environments.  In short, Neo-Liberalism could be characterized by de-regulation and an emphasis on market-led globalization.  However, Liberalism has developed out of Capitalism, which has its own justifications and philosophical tenets to endorse it as a most “natural” system.

Under capitalism the focus of economic activity is to accumulate a surplus.  This surplus can then be reinvested in order to generate still more profits, and so on, ad infinitum.  Adam Smith, in his famous work An Inquiry Into the Nature and Causes of the Wealth of Nations, portrays human economic activity as motivated by self-love and a regard to ones own interests.[1]  For Smith, this “natural” law of human behavior explained demand, the division of labour, and the desire to achieve surpluses or profits.  However, Smith admits that the human being is a social animal.  In this case individuals’ self-interest regulates social contracts of exchange;

“In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and its natural state has occasion for the assistance of no other living creature.  But man has almost constant occasion for the help of his brethren, and it is vain to for him to expect it from their benevolence only.  He will be more likely to prevail if he can interest their self-love in his favor, and show them that it is for their own advantage to do for him what he requires of them.  Whoever offers a bargain of any kind, proposes to do this.  Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices in which we stand in need of.  It is not the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”[2]      

This is an ethical statement.  Actually it is not unlike Aristotle’s view that all human behavior is explained as arising from the individual’s attempt to find a “good” for themselves. It is from this philosophy in which western capitalism has been framed for the past three centuries.  Today Smithian economic ethics paired with Liberalism is the reigning paradigm in contemporary circles of power.


Ethics

It would be good to define ethics as such before we proceed.  The laws of ethics pertain to the relationship of two parties or individuals, through exchanges in behavior, actions, contracts, and goods, for example.  Ethics can be understood as stemming from a universal subjective truth based on an empathetical understanding of reciprocity.  The so-called Golden Rule is probably the most famous ethical formula, and has manifestations in philosophical and religious system throughout the world.  It has both positive and negative expressions.  Positively it would run “Do unto others, as you shall have done to you.”  The negative version would be something like, “Don’t do unto others, as would not have them do to you.”

Ethics in a pure sense should, for philosophical reasons, be distinguished from morality.  Ethical truths should be valid across cultures, and could be even seen as the only universal trend lying within all the world’s major religions.  “Thou shall not kill,” is universally confirmed by all religions.  But in this case religions are not even needed to confirm the ethical truth of this statement.  However, despite the fact that this statement might be universally accepted, generally there is a wide diversity of interpretation.  The Jains of India take it in an absolute sense and avoid killing any life including animals, insects and plants. Abortion, war, and the death penalty are all issues that collide directly with ethical understanding.

Morality should be seen as particular to cultures, regions, and ritualized behavior.  These morals are not always translatable across cultures.  Morals are cultural choices and preferences that often determine an aesthetic or practical use.  As Nietzsche pointed out so clearly, there is no real inherent truth to the “good” or “bad” judgments in morality.  Rather this is reserved for ethics.

It could be argued that any economic theory must, at its root, have an ethical foundation.  If ethics exists when two individuals begin to interact with each other, and when they exchange goods, services, or make contracts an economy exists, isn’t this economy simply a sub-category of an ethical domain?  Usually, in order for an economic theory to prevail in the minds of individuals, in must appeal to a perceived social justice of the system.  Conflicts of economic ideologies focus on the injustices and philosophic falsities of other systems, and propose their own more true and just ideologies as solutions or alternatives.  Marxists point to the exploitation of labor in Capitalism.  Capitalists point to the suppression of the entrepreneurial freedom of the individual in Marxian theory.  Does not this characterize the Cold War conflict or the conflict between the West/North and the South/East and radical Islam?   And, aren’t these conflicts, at their root, really about ethical ideologies of how human beings should relate to each other via the means of economy, political systems, and distribution of wealth?


Economic Behavior from the Religious Traditions

The source of ethical (and moral) understanding has come mainly from the world’s secular philosophical traditions as well as from sacred traditions represented in the world’s major religions.  These traditions have had enormous impact on the economic behavior of societies and individuals throughout history.  Before the rise of Secularism in the 18th century many regions of the world functioned under the influence of religious laws, or laws that at least did no harm to the prevailing faith.  Economic behavior was also largely influenced by clerics.  For example, it was possible in the high middles ages for the Pope to ban the collection of usury (interest) on given loans in all Christian kingdoms!

One effect of globalization is that it has facilitated the spread of religious ideas.  The Internet, the media, missionaries, and religious NGOs have all reached wider audiences and have accelerated the influences of their religious groups in ever widening circles.  Inter-faith communication and Multi-faith communication has been on the rise.  It appears, that despite a long and now global tend towards secularization, religion is to play a large role in whatever globalized world we end up with.

In the last recent decades religious groups have even begun critical discussions about the effects of globalization on their faiths, society, and the environment.  In efforts to use their religious traditions to find solutions a whole new range of concepts has emerged from these discussions.  Concepts such as “Gross National Happiness” from the Buddhists, “profit sharing” from the Muslims, or “New Traditional Economy” from the Confucians all reflect the desire to avoid a western Neo-Liberal homogenization of the world’s global economy.

The Judeo-tradition tends to condone wealth but only if it is achieved in an ethical way and used morally.  The Torah, or the five books of Moses, is the main Jewish religious text.  It is from this ancient text and the parallel tradition of the Talmud that dictates Jewish religious law.

Moses is a central figure in the Torah and functions as the law-giver in the Jewish tradition.  After he leads his people out of Egypt, God dictates to Moses the divine commandments which the children of Israel are to follow in order to avoid his wrath.  The collection of interest on loans is forbidden; “If you lend money to any of my people with you who is poor, you shall not be to him as a creditor, and you shall not exact interest from him.”(Exodus, 25).  However, this is later condoned with foreigners; “You shall not lend upon interest to your brother, interest on money, interest on victuals, interest on anything that is lent for interest.  To a foreigner you may lend interest, but to your brother you not lend upon interest; that the Lord your God may bless you in all that you undertake in the land which you are entering to take possession of it.”(Deuteronomy, 19).  This double standard is of course not ethical in the sense that we want it here.  Rather the important issue here is the justice of exacting interest.

The Torah is full of moral laws that pertain to mostly criminal acts and ritual life.  However, some of these are truly ethical (in the sense that they could be universally translated) and play a large role in the economic behavior of the believers.  “You shall do no wrong in judgment, in measures of length or weight or quantity.  You shall have just balances, just weights, a just ephah, and a just hin:  I am the Lord your God who brought you out of Egypt.” (Leviticus, 35).  And, “Cursed be he who removes his neighbor’s landmark.” (Deuteronomy, 17).

One obvious characteristic of the Jewish tradition, and one which is shared by the

Christians, is the seven-day week.  Here God commands the believers to work six days and rest for one.  Whereas this may be merely a moral issue, it may commonly be called a “work ethic”.  We can understand this as a good term when we understand that many religions see labor as having social implications beyond the individual worker.  Surpluses should be distributed to the needy liberally in a type of primitive socialism.

Christianity has inherited a great deal from the Jewish tradition.  The books of the Old Testament in the Christian Bible are also part of the Jewish canon.  Differences in religious economic ethics are to be found in the New Testament as dictated by Jesus Christ, who, like Moses figures as a sort of religious law-giver.

Wealth is seen in a much more critical manner.  Earthly wealth is contrasted to the real reward awaiting the believers in the after-life.  “You can not serve both God and mammon.” (Matthew, 6.24).  And, ‘Do not lay up for yourselves treasures on earth, where moth and rust consume and where thieves break in and steal, but lay up for yourselves treasure in heaven, where neither moth nor rust consumes and where thieves do not break in and steal.”  (Matthew, 6.19).  The last statement is similar to teachings in Buddhism where wealth is associated with social injustice and crime.  It would be argued that wealth produces crime.  Believers, following these tenets strictly and hoping for a mystical reward, may not behave in an economic manner where they see the social implications of their labor (surpluses).  Rather, they retreat from the world and focus on spiritual work.  For this reason many scholars have condemned Buddhism in particular as not conducive to economic growth.  

In practice, ironically, the Christian Church has amassed enormous wealth throughout history, and had generally supported the economic institutions of Europe until the 19th century.  Nevertheless, the power and influence of the Christian churches waned in the face of modern science and philosophy in the era of the Enlightenment.  By the mid 19th century most political states were moving towards secularization and were severing their ties of legitimacy with the Church; popes were no longer needed to crown kings, for example.  During the Cold War as well, the Christian Church had little influence over society, being frustrated by either secularism or communism.

The practice of Christianity and the history of the Church seem often hard to reconcile with message of their Gospel.  But this is just a classic case example of the reality of power politics, and a struggle between political and religious authority.  As religions are born and grow into institutions they require more than the establishment of faith on earth.  They become economic entities which require the maintenance of the religious elite, land, the building of temples and monasteries, and the distributions of charities. 

The message of the Christian doctrine seems to emphasize a different set of values, one which strives to control the materialistic desires of the individual and rather sets them on a personal spiritual life.  The dangers of wealth and the spiritual superiority of the poor are repeatedly expressed.  In one famous story, a ruler asks Jesus what he shall do to inherit eternal life.  Jesus advises; “Sell all that you have and distribute it to the poor, and you will have treasure in heaven, and come, follow me.” (Luke 18.22).  But this response depressed the man because he was very rich.  Jesus continues; “How hard it is for those who have riches to enter the kingdom of heaven!  For it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.” (Luke 18.25).

Mohammed, the prophet of Islam, is said to have been involved in some form of personal trade.  Perhaps this has influenced the positive economic attitude of the Koran. Certainly economic issues are much more widely discussed in the Koran than in the Torah or the Gospels.  Nearly a fifth of the Suras in the Koran pertain to economic issues.

One trait the Koran shares with the Jewish tradition is the condemnation of the collection of interest, albeit without the Jewish double standard.  "O you who believe! Devour not interest, doubled and redoubled, and be careful of Allah; haply so you will prosper." (Koran 3:130).  And: "O you who believe be careful of Allah and give up the interest that is added. And if you do not then be ware of war from Allah and His messenger.." (Koran 2:278-279).  But the reason for this probably differs from that of the Jewish tradition.  Whereas, it could be argued, the Jewish version perceives the exploitation involved in the collection of interest; in the Muslim tradition exacting interest does not qualify as a valid means of income.  Money should be earned through any means in which effort is applied.  This explains the institution of “profit sharing” by banks which function under Islamic principles, such as in Iran or in Pakistan.

Almost all other kinds of commerce are explicitly condoned.  “Allah has allowed the business of selling.” (Koran 2.275).  Even profit making is allowed.  All money making should be “productive”.  This includes not only the manufacture and sale of merchandize, but also includes most services.  Increased value through transfers is accepted, as well a providing information services.  All these endeavors are considered productive in the sense that the entrepreneurs must achieve their incomes through either their skills or their labor.

Islam is no different than the other major world religions when it comes to charitable behavior.  Wealth can be used for individual pleasures, but not all of it!  The giving of alms is explicitly commanded in the Koran as in other sacred texts.

Many western scholars have falsely associated Buddhism with poor economic behavior, with little possibility of economic growth.  This has developed through the perception that the only aim of the Buddhist is to reject the world and seek seclusion in order to meditate one’s entire life in the hopes of reaching Enlightenment.  But these perceptions fail to notice that the community, or the Sanga, is of essential importance in Buddhism.  The existence of the Sanga is the basis in which individuals behave towards each other.

Buddhism is not a true religion per se; at least there is no real godhead.  Rather Buddhism could be considered to be a type of metaphysical psychology which focuses on the human being and their primary thoughts and desires.  Values, motivations, desires, effort, and suffering are deeply analyzed through meditation and “purified” by correction according to the teachings of the Buddha, or the Dharma.  For this reason a Buddhist, when confronted with a term such as “demand”, would immediately transform this to the concept of “desire”, and would conclude the desired thing is dependent on meaning and/or usefulness to the individual.

Buddhist texts are not as explicit on economic behavior as those in the monotheistic religions.  Rather, a pre-emptive psychology (basically a religious ethical system) would define pre-conditions to economic possibilities.  The law of Karma necessitates that all actions are at some point reciprocated, even, and most probably in a future live.  Buddhists strive to achieve higher future births (lives with more ease, and less suffering) by practicing good deeds, generosity, and other virtues in hopes of a future reward.  Unrighteous livelihood is shunned if the results of one’s work leads to others’ suffering.

“In this modern world right livelihood can be one of the most difficult rules to obey.  So many kinds of work are harmful to society and are unworthy of a true Buddhist.  There are the arms and nuclear warfare industries; the drink trade; occupations involving the slaughter or vivisection of animals; yellow journalism; dishonest advertising and publicity; and business that includes usury.  Buddhism is not a narrow-minded religion.  It regards human frailties with understanding and sympathy.  Yet the sincere Buddhist cannot profess one code of morality and earn his living in an occupation with another, debased code.”[3] Confucianism is another moral code.  Its basic concept is that of propriety.  Social roles are considered to have inherent responsibilities.  To put it rather simply, a father should fulfill the duties of the father, the statesman those of the statesman, the doctor those of the doctor, and so forth.  Confucianism has influenced Buddhism and Taoism in China, Korea, and Japan.   Like most other belief-systems, Confucianism praises the agricultural trade, and shuns corrupt financial practices.  The redistribution of wealth is highly endorsed through a strict moral code based on social relations.


Conclusion

Pure economics would have little success in long-term implementation without a solid case for a system of social justice.  This is not to say that the science of pure economics is not useful.  Rather, it is argued that any system of economics with its associated ideologies must be all inclusive, and that this necessitates a socially just system.  Social unrest, which can be deadly to economies, would be the result at some point in societies where groups feel and perceive themselves to be unjustly marginalized.

The core issues are really that of the redistribution of wealth and of the relation between classes.  It would be argued that these must be satisfied as a precondition of any economic theory in order to avoid conflicts within society in the long term.  Power politics, privilege seeking, enforcement, exploitation, and the creation of ideologies and identities are true factors in the real world which could both stem or induce conflicts, and mobilize or solidify classes.

Religions have traditionally provided answers the some of humanity’s deepest questions, the soteriological problem (the problem of death) being probably at the center of the issue.  However, religious traditions have also tried to explain, but often in theological terms, the situation of human beings on earth and their relations to each other.  Wealth, caste, opportunity, success, intelligence, and spirituality are explained as the results of previous Karma in Hinduism and Buddhism, and that the current actions influence the future results in these areas.  In Christianity and in Confucianism these would be explained by God’s favor (grace) towards one’s current actions in the first case, or in ones current harmony with moral precepts in the other.  In Islam these conditions are predetermined as part of Allah’ alien will.  These worldviews certainly affect the individuals’ motivations and understandings in a socio-economic context.

Furthermore, religions have also confronted the issues of the redistribution of wealth and of class relation.  However, religions tend to focus on ethical and/or moral codes of understanding in order to implement a socially just system.  Economics are secondary; and this is often the case in the minds of devout believers.

It is not to be argued here that there is any truth to the religious codes as pertains to economics.  The issue at stake is that of a possible ethical convergence.  Today we here on the media stories; in Nepal, Tibet, Turkey, Iran, Pakistan, and many other places where religious ideas are struggling with secularized systems or conflicting religious views.  Popular theories about future potential clashes of culture, civilization, and religions highlight and reveal the differences in ideologies that exist at the present.

It could be proposed that ethics as a true science would be a dialog point for many systems that are perceived to be in conflict.  At least, perhaps, an ethical “least common denominator” could be found that would help homogenizing and lessening conflicts over issues such as war, international law, rights, politics, economics, and the environment.  It is not to be denied that most proposed religious, political, and economic ideological system are not already perfectly ethical in and of themselves.  For example, the theories of Neo-liberalism promise to bring a socially just world, and perhaps it could if the system were fully implemented.  However, Neo-liberal practices which would aim at maximum free markets are compromised by restrictions on international labor mobility and agricultural protectionism.

Another problem arises around the issue of development and aid projects.  One of my associates, a French development worker, recently came into conflict with the World Bank over the interest exacted for money lent for a project in Mongolia.  “If you charge them interest, there is no development!” he protested.  Surprisingly, in this case, the World Bank conceded and no interest was charged.  These sentiments were coming from a non-religious westerner, but doesn’t this remind us of similar convictions from the Koran or the Torah?

To conclude, let us recognize the connection between ethics and economics as pertains to the implementation of a system and its long term continuity.  Furthermore, that social injustice as perceived both within and across systems lend to the possibility of conflicts and resulting economic anomalies.  Religious actors will remain influential on perceptions of social justice.  And finally, an ethical common ground or a comparative ethics across systems could bridge understandings both between religious traditions and between secular and non-secular societies.


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MA Global Studies-A European Perspective

Erasmus Mundus Program

University of Leipzig


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[1] Smith, Wealth of Nations, pp.7

[2] Smith, Wealth of Nations, pp. 7

[3] Walter, John, Mind Unshaken(1961, Rider and Company) p. 47