Volume 44, Number 175,
October-December 2013
Challenging Conventional Economics:
An Ethical Development Paradigm
Nikos Astroulakis

Meanwhile, mainstream patterns of economic growth mask economic imperialism. "Embracing one new field after another, economic imperialism reaches its most extreme version in the form of freakonomics, the economic theory of everything on the basis of the most shallow principles" (Milonakis and Fine, 2009: i). The idea of the good life is also addressed through welfare and social theories on choice (Becker, 1976; Feldman and Serrano, 2006). Under this assumption of economic rationality, individuals always or almost always act in their own best interest. By contrast, Pareto's optimality explains the conditions under which an individual or group of individuals experience an improvement in their welfare (Hochman and Rodgers, 1969). As Hodgson (2001: xvi) points out, “[…] economics as a whole was radically transformed. It lost its emphasis on the study of real, socio-economic systems, instead to become a deductivist exploration of ‘individual choice.’” At this level, economic imperialism can be expressed in more than ideological terms; it can also be described in terms of choices applied to economic growth. Since the mid-twentieth century, development has gone down the path of economic growth in the mode of mainstream economics. In the words of Milonakis and Fine (2009: 8), "the scope of application was reduced to the economy considered simply as market relations, while, on the other hand, its basic conceptual principles, such as equilibrium, rationality, scarcity and choice, became more and more universal in content and application.” Mainstream economics and its imperialism in social science methods and practices affect the way in which development is perceived.

On the applied level, the imperialism of dominant mainstream economics leads to global economic dualism, unfair international relations, political interventions and unacceptable commercial relations. Recent economic imperialism has its historical roots in colonialism. Nations that developed under a colonial rationality continue to exploit those that are still developing. Wars and conflicts for resources and sovereign control tend to undermine world peace; mandatory migration has been approved. Environmental destruction has become a first order threat to the planet and historically, "the logic of the capitalistic system which presided over the industrial revolution led expanding economies to establish economic relations marked by a new kind of imperialism vis-à-vis non-industrialized nations" (Goulet, 1975 [1971]; 39). In this context, the theory and practice of mainstream economics would appear to increase global political, social and economic dualism.

In a globalized world, there are important contradictions and inequalities among societies, nations and even individuals. As a result, one of the key objectives of development ethics is to reduce global social, political and economic dualism. As Goulet points out (2006: 190), "it is now apparent that development does not deliver economic well-being to all nations and peoples: in this distribution of benefits, it is not just.” Industrialized nations have frequently exploited non-industrialized countries through the use of resources, political interventions, cultural imitation and domination. In reality, there exists economic, political and social dualism between developed nations and those that are still developing, as well as between groups and ordinary people of these nations. Freyssinet (cited in Goulet, 1975 [1971]: 39) argues that the Industrial Revolution of Western capitalist economies not only accentuated the spread and aggravated the lag, but actually propelled industrial economies, on the one hand, and non-industrialized economies on the other, into diverse paths.” This dualism cannot promote the idea of a “good” global society. The development pattern of mainstream economics does not provide equal benefits to all nations and people. A good society is a predetermined end state, that of the Western affluent society.

The means to achieve economic growth have also been predetermined by advanced developed nations and international institutions of power. For development ethicists, even if economic growth is a means to a good society, it is not the only goal. Further, economic growth is not the most efficient way of achieving human development. "Profit is an over-riding priority that is justified by relating ends and means to the concept of 'efficiency'" (Dussel and Ibarra-Colado, 2006: 501). With regard to this, Sen (1983: 760) ascertains that "traditional development economics has been less successful in characterizing economic development, which involves the expansion of peoples' capabilities. For this, economic growth is only a means and often not a very efficient means either."

Unlike mainstream economics, development ethics in the context of social economics investigates the ethical aspects of a good society and it is apparent that this is not a value-free process. On the contrary, this process is highly ideological. Economic, political and social factors together with their ethical aspects, for both societies and individuals, are the fundamental ingredients for a good society. The key argument of development ethics, in contrast to mainstream economics, is that there is no single way to assess a good society. A conventional approach – in terms of predominant practices and studies – perceives values as either helpful or obstacles to achieving objectives. In other words, a good society is predetermined and values are used functionally by subordinating them, while Westernized logic proposes that a good society is based solely on economic growth. By contrast, development ethics holds that each society has its own institutional fabric, values and historical heritage, and as such, development must be a process tailored to each society and nation under the notion that everyone, in any place, needs basic goods to maintain life, liberty and dignity.

Development ethicists argue that beyond prosperity, in other words, economic growth, there are other factors that determine the concept of welfare and a good society. As an alternative to mainstream economics, development ethics addresses ethical difficulties related to the meaning of welfare, the foundation of justice within and between societies, and both the individual and social human relationship to nature.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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