An Aristotelian Vision for the Global Economy

By Panos Mourdoukoutas
Professor of Economics, Long Island University

Panos Mourdoukoutas
The message of the World Economic Forum held recently in New York was clear and loud. The global economy needs a vision. It needs a set of core values that define its character and a mission that creates the chemistry that blends together the interests of its members, and sets ultimate goals. It also needs a system of values, a common denominator of ethics practiced by the international and local communities and a mission, a common denominator of the far-reaching goals of these communities.

But is there such a thing as a common denominator in the values and the goals of the diverse communities? Simply put, are there broadly acceptably ethics in a global society? Are there common goals shared by the members of the international and the local communities?

Some social scientists find a common denominator between western and non-Western values, such as the Japanese Kyoshi (living and working together for the common good) and the Western values of individual liberty; a common denominator between the Hindu Dharma (the Fulfillment of inherited duty) and the Western value of egalitarianism; the Buddhist Santutthi (the importance of self-restrain) and the Western value of participation; and the Muslim zakat (the duty to help the poor) and the Western notion of human rights.

Other social scientists find a common denominator in the philosophical system that shaped Western values and ethics, namely the classical Greek philosophy of Plato and Aristotle, especially of Plato and Aristotle, especially the list of "virtue ethics," wisdom, courage, self-control, and justice. "Virtue ethics" are important in ensuring compatibility between the objectives of the members of an organization and those of society, leading to harmony and eudaimonia, the material and spiritual well being of the individual and the community.

Who is right? Which system of values is more appropriate in defining the core values and the mission of the Global economy?

Certainly both approaches include values shared by the world community. Aristotelian ethics are more broadly accepted than other systems suggested and, therefore, can more easily translate into specific cultural codes than other systems.

In addition, Aristotelian ethics was never part of a religion that people had to believe without questioning its validity and rationale. In fact, the Aristotelian system was the first serious attempt to rationalize a system of values and ethics that support and reinforce individual and social harmony.

Aristotle inspired the creation of corporations that see not just profits for stockholders and hefty bonuses and perks, for managers of large corporations, but what Henri Bergson and Karl Popper described more than half a century ago, an open society. A society where people make their own choices, a society freed from the tyranny of the central planners of communist regimes on the one side and the statism of fascist regimes on the other.

Globalization is founded on the premise of an open society, which can remain open only if corporations grow with, now without the international and the local communities. The benefits of globalization must spread broadly, not just among the stockholders and managers of large corporations, but among its other stakeholders, labor and the world community. Global harmony and global eudaimonia must become the ultimate goals of corporations.

Global Harmony

As is often emphasized, today's globalization is not a new trend, but the resumption of an old trend that started a century ago with the expansion of cross-county trade and investments.

Books by Panos Mourdoukatas include Collective Entrepreneurship in a Globalizing Economy and The Global Corporation, both published by Quorum Books
One factor that forestalled this trend was the rising of national and regional inequalities, the concentration of wealth on the one side and misery on the other. These inequalities fueled the rise of communist and fascist regimes, which led to central planning, regulation, nationalism, trade protectionism, and war.

As a result, the flow of goods and services across national borders slows down, creating a fragmented multinational rather than an integrated global economy.

To avoid a repetition of the rise of totalitarianism, nationalism and trade protectionism, the world community must deal with one of the side effects of globalization--the rising inequality--by providing a safety net for those who cannot keep up with its demands.

As Dan Rodrik puts it, 'The broader challenge for the 21st century is to engineer a new balance between market and society, one that will continue to unleash the creative energies of private entrepreneurship without ending the social basis of cooperation.

Corporations must assume a larger responsibility and contribute resources for the strengthening of international organizations such as the World Trade Organizations, the International Monetary Fund, and the United Nations.

Corporations must further contribute to the creation of an "Open Society Fund" to assist individual countries develop and preserve democracy and openness. To be viable, these policies must take a step further towards global eudaimonia.

Global Eudaimonia

Coined by Aristotle, the term eudaimonia means the materials and the spiritual well being of a community, the ultimate goal the telos of the society. To reach material and spiritual eudaimonia, many communities need to take a step beyond conventional democracy and inequality, must advance towards economic democracy that opens up markets to competition and puts consumers rather than producers of government behind the steering wheel of the economy.

As Walter B. Winston put it in a 1974 speech: "the world corporation has become a new weight in an old balance and must play a constructive role in moving the world to freer exchange of the ideas and the means of producing so that people of the world may one day enjoy the traits of a truly global society.

Corporations must work closely with governments to deter market concentration, and the formation of monopolies, provide a "safety net" for those unable to keep up with the demands of capitalism, and to deal with additional "side effects" of globalization, psychological stress, environmental pollution, and nuclear proliferation.

Panos Mourdoukoutas is Professor of Economics at Long Island University and the author of The Global Corporation, Quorum Books, Westport, CT, 1999