Does Virtue Have a Cost?

 

Camila Ricaud-Honorbound

When it comes to the busy, economic spectrum, we think of charts and monetary policies, holding money as the main principle when it comes to economics and rarely questioning the gravity of virtue. Virtue is usually associated with something unsubstantial, something we usually learn about in grade school theology class, when in reality, the life of virtue in the workplace, holds great impact. A direct example of a country that recognizes the benefits of virtuous behavior in economics and applies it, is Europe. Well-known economist Charles Wheelan references an issue that notes the pros and cons that come from Europe’s virtuous approach in economics, in comparison to the U.S’. In his book Naked Economics, he says “Europe offers the kinder, gentler version of a market economy- at some cost”.[i]  Wheelan follows his idea, “the European nations are more protective of workers and have a more substantial safety net…their generous benefits are mandates by law and health care is a birthright which leads to a more compassionate society in many ways”.[ii] Europe sees far lower poverty rates than the U.S, and lower income inequality as well; however, it also leads to higher unemployment and a slower rate of innovation and job creation, which proves that virtue does have a cost.

On the other hand, the American system is a richer, more entrepreneurial economy, but also a more unequal and harsh one. We see this in the education system as well, Finland in particular, who has taken the more sympathetic, reasonable and compassionate take by limiting the amount of homework on students, granting them more recess time for them to expand their curiosity, much shorter school days, and all in all, less stress and more free time. Finland takes into account the importance of equality, as OECD says, “Equality is the most important word in Finnish education”. [iii] They omit competition between students, schools and regions, giving each school the same education, thus omitting any ranking which gives students unneeded stress. Wheelan reinforces this importance of equality, “the European system is better at guaranteeing at least some pie for everybody. Whereas the American system is “conducive to creating a big pie in which the winners get huge slices”.[iv] So, in Europe, by being rooted in virtue and compassion, their education has seen incredible success, which then gives for more jobs, and more prosperity in every single person.

As John Mueller, author of The Role of Business Virtue in Economic Development expresses, “virtuous behavior is, on balance and in the long run, more profitable”.[v] And the more productive we are, the richer we are. Virtue is the groundwork to our wealth, to the longevity of worker’s jobs, to the human capital we each offer. If it became a priority in every corporation, the economy would notice great success.

[i] Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. New York: Norton, 2002 [319]

[ii] Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. New York: Norton, 2002. [319]

[iii] Hancock, LynNell. “Why Are Finland’s Schools Successful?” Smithsonian.com. September 2011. Accessed December 03, 2016. http://www.smithsonianmag.com/innovation/why-are-finlands-schools-successful-49859555/

[iv] Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. New York: Norton, 2002 [320]

[v] John Mueller. “The Role of Business Virtue in Economic Development” June 14, 2004. Accessed December 3, 2016. http://www.politicalscience.osu.edu/faculty/jmueller/BUSVRCEU.PDF.

 

 

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