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SOCIAL
VALUES-I
Honesty And
Integrity Should Be Basis Of Economic Growth
By Fr. J.
FELIX RAJ
(Published in
the Statesman, March 14 & 15, 2005.)
Adam Smith
had predicted in 1750 that Chine and Industan would emerge as
economic powers in the 21st century. China has become a major
player in the world economy. Twenty years of sustained growth
have transformed the economy. It is fast becoming the centre of
growth of regional production and trade. While Smith’s
prediction is coming true in respect of China, India is lagging
behind. China’s strategy is methodical and deliberate, but
India’s is chaotic and opportunistic.
Management
institutes teach a lot of things — managerial economics,
accounting, rural development, marketing, and retailing, among
others. Nowadays, they are also trying to instill something they
should have been doing all along. They call it “ethics”, and a
few of them call it “business ethics” or “development ethics”
(as if that was something different from “regular” ethics), but
they are all trying to counteract the loss of trust, honesty and
truthfulness that has been created by the massive business
frauds of the last few decades.
Code of
conduct
Ethics is a
code of conduct, concerned with how a person should behave. It
refers to principles that define behaviour as right and wrong.
Such principles do not always dictate a single moral course of
action, but provide a means of evaluating and deciding among
competing options. Values are the inner judgments that determine
how a person is and behaves. We translate values into principles
so that they can guide and motivate moral and ethical conduct.
Values are different from ethics.
Ethics are
said to flow from the head, while values from the heart. Ethics
have western leanings and values eastern. Ethics are what we
practice at work place while values are what we live at home.
For example, trust, truth, honesty, integrity are values. The
terms “ethics” and “values” are not interchangeable. Ethics flow
from values and not vice-versa.
Paul Zak and
Stephen Knack of the World Bank Research Group have observed
that high-value societies exhibit higher rates of investment and
growth and vice versa. They show that very low value societies
can be caught in a poverty trap. According to them, values
potentially can influence economic performance through either of
two major channels, “micro-economic” and “macro-political”. At
the micro level, social ties and inter-personal trust can reduce
transactions costs, enforce contracts, and facilitate credit at
the level of individual investors. At the macro level, social
cohesion underlying trust and honesty may strengthen democratic
governance, improve the efficiency and honesty of public
administration, and improve the quality of economic policies.
Key
factors
Trust and
honesty are key factors. According to Piotr Sztompka, trust is a
belief that the other agents would act in a predictable way and
fulfil their obligations without special sanctions. A
prerequisite of trust is honesty. As Jim Clemmer explains,
honesty is a clear conscience “before myself and before my
fellow human beings”. Honesty is the awareness of what is right
and appropriate in one’s role, one’s behaviour, and one
relationship. With honesty, there is no hypocrisy or
artificiality, which create confusion and mistrust in the minds
and lives of others.
Honesty
makes for a life of integrity because the inner and outer selves
are a mirror image. To have one form internally and another form
externally creates barriers and can cause damage since one would
neither be able to come close to anyone else, nor would others
want to be close. Some think, “I am honest, but no one
understands me”. That is not honesty. Honesty is as distinct as
a flawless diamond, which can never remain hidden. The worth is
visible in one’s actions.
Honesty and
integrity are fundamental to leadership. Honesty and integrity
produce trust, which produces high levels of confidence. High
confidence encourages people to dream and to reach for new
horizons. High confidence fosters risk-taking. Risk-taking and
initiative are fundamental to organisational change and
improvement. Our ability to lead others is directly related to
our ability to forge strong relationships. Leadership quality is
directly related to relationship with people. Strong
relationships are dependent on trust. Trust provides the glue.
But, unfortunately, values are not always present in many people
and countries.
Here is a
first-hand report of the Venezuelan situation by Mark Tweito.
“Having now lived for over a year in Venezuela, I have been able
to put my finger on one of the reasons I feel that Venezuela is
not able to economically advance at the level it could. It is
not that Venezuelans are lazy, as many of them work long hours
for little pay. It is not a matter of intelligence either, as
most Venezuelans are able to grasp difficult concepts and are
able to make do with the materials at hand in order to solve
problems. However, there is a rampant problem with distrust.
This arises from the rampant corruption on the part of many
citizens. It is simply harder to make business when trust is
lacking. If Venezuelans want to improve their economy, one of
the best ways would be to act trustworthy”.
Dominant
economy
The USA is
the premier and dominant economy through the post-World War II
period. With a population of around 285 million, it is known as
the “land of opportunities”. It has a little bit of every
country, culture and religion in the world. The USA produces the
largest GDP in the world, valued at $9.87 trillion in 2000. Its
GDP per capita is around $37,600 in 2002. The real GDP, GDP per
capita and inflationary rates have been more or less
representative of a leading world power over the past several
decades.
Bradford
DeLong and Claudia Goldin show that tolerance and trust have
been main reasons for the
USA’s undisputed economic
growth. “We are different but we can live in harmony” has been
the mantra in the USA where creativity and knowledge are valued.
Unity in diversity breeds creativity. Silicon Valley is a
concrete example for this. You ask the people in SV what makes
their company special. The immediate answer is: “integrity”. As
George Anders, a Fast Company senior editor based in SV, put it:
“we live and work in a world where the Internet changes
everything”. But the smartest people here believe that honesty
is still the best policy.
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