The Economics of Moral Value
Is moral value, as some theories of ethics insist, different from economic value? Should the moral value always override the economic value?
1. Moral value vs. economic value
John Ray said, “The honester the man, the worse luck." To be sure, moral justice is not always compatible with economic profit. Suppose you happen to find your company is making an illegal sale. What would you do? Maybe you would be worried about how to cope with the situation:
“Should I inform against the company for the sake of social justice? But this would worsen the achievement of our company. If the company should detect my betrayal, they will fire me. In Japan, it is very hard for a middle-aged man like me to take up another employment. So, should I overlook it?"
Now you are caught in the dilemma of which to select, moral value or economic value.
Of course, generally speaking, those societies where people respect social justice are more economically affluent than anarchy. But the individual economic benefit often comes into conflict with social justice in the short term.
2. Why should we observe moral?
Before examining the difference between moral and economic value, let’s recognize what morality is.
The classical ethics that distinguishes morality form utilitarian calculation is this: “Morally bad conduct contradicts itself, when you universalize your maxim. For example, if an egoist universalizes his maxim and allows anyone to be an egoist and thus disregard his interests, it will be against his interests and the egoism that he first intended. The moral law is quite different from utilitarian calculation in that the former is a law of reason a priori, while the latter depends on empirical facts a posteriori."
Why must the maxim be universal, then? If social norms (moral and legal laws) contradict themselves, we will be at a loss how to behave. So, the maxim that cannot be universal increases the indeterminacy of behavior. In other words, it is because social norms reduce the social entropy that obeying them is valuable.
Telling a lie is morally bad, even if it does not directly disadvantage anyone. That’s because it increases the indeterminacy of information, if everyone starts to tell a lie. Committing a theft is a violation of the law in almost every country. That’s because it increases the indeterminacy of proprietary rights, if you overlook a theft, and so on.
3. Moral value is the same as economic value
I asserted at my article, “What is Value?", that the necessary and sufficient condition for economical value is low entropy (usefulness and scarcity). Social norms have usefulness and scarcity as their low entropy. Just as labor is negentropy that produces commodities as its low entropy, law observance is negentropy that creates social order as its low entropy.
I will show why social norms have usefulness and scarcity.
It is quite evident that individual law observance contributes to social order. So, social norms have usefulness.
How about scarcity? It is not valuable for a saint to observe moral laws any more than for us to walk. However, just as it is touching and valuable for a baby that has crawled on its hands and knees to succeed in walking, so is it touching and valuable for a villain to renounce his former sins and becomes a morally right person. It is because we might yield to temptation that the moral conduct as its negation has scarcity value.
If moral value as well as economical value consists in low entropy, you do not have to consider the former to be something transcending the latter. I cannot support an extreme maxim, “Fiat justitia, pereat mundus. (Let justice be done, though the world be destroyed.)", because it loses an economical balance.
Let’s return to the first question of illegal sale of your company. Which to choose between moral justice and economical benefits, like a purely economical question as to which to buy, stock or bond, depends on the situation. The problem is which do you anticipate will bring about more negentropy.