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Old lamp post with a sign pointing left with the word 'vice' written on, and a sign pointing right with the word 'virtue' on it.

New virtue to tackle old vices

23 Dec 2013 | Joshua Graham

The study of philosophy often gets a bad reputation: insular, or worse, completely irrelevant outside of universities. Sadly, in my experience as a recent(ish) philosophy graduate it is partly deserved, so I was pleasantly surprised to hear Maria Pereira, whose background is in banking and finance, eloquently join the dots at the GCPH seminar between philosophical tradition and the state of our current economy.

The work that Oxfam is doing around the Humankind Index and Our Economy resonates with the new economic vision that Maria went on to present and, for me, is reassuring of the fact that there is a basis for this radical and badly needed new economy.

Our current focus on maximising wealth comes mainly from Adam Smith whose work, as Maria pointed out, has inspired a form of capitalism that prioritises wealth above all – the idea that ‘I need only worry about my personal gain as the benefits of my wealth will “trickle down” to others’. So, if our combined wealth (GDP) is increasing it should mean that we all win, correct?

Though there was a time when we might have said “yes”, now this is clearly not the case: more people are being pushed into poverty, as can be seen through signs such as the increase in food banks across the UK.

Smith’s ideas came to prominence during the Enlightenment period in the 18th century which saw societies shift towards democracy and scientific ideals.  The rights of individuals to pursue personal wealth became prioritised over those of the tyrannical institutions which came before and - to an extent - this was an equalising force. However, the warning signs were there: even in France, the birthplace of the Enlightenment, suffrage was not extended to women until 1944. Some are always more equal than others.

Nowadays it is clear that the myth of wealth creation as a great leveller is just that, a myth, which only serves to create new elites similar to the ones it was originally designed to protect us from.

Maria went on to claim that Adam Smith is misunderstood and always said that cooperation underlies any social contract, however the misinterpretation of his thought has since become the backbone of our economic system, with damaging results.

To flesh out an alternative, Maria drew from ‘virtue theory’  which has its ancient origins in Aristotle. Virtue theory tells us to act in a way which embodies love for another by displaying the qualities we want to see in people (compassion or self-sacrifice, for example) rather than in a way which will increase ‘the greater good’, as Adam Smith would want and as we so often do, confusing the greater good with growing GDP.

By incorporating some ‘virtue theory’ into our understanding of the economy Maria hopes that we might start to value the people at the heart of it for their own sake.

Enter Oxfam’s Humankind Index. It measures prosperity based on the things beyond money alone that are important to those whose voices are so often muted because of our current economy: job security, health, community. Doing so reveals stark inequalities and identifies in what areas and for whom change needs to take place if we want to create a sustainable and just society.

We must thank Maria Pereira for her dynamic vision and for joining Oxfam and its partners, as well as the GCPH and many other organisations globally, in leading the way towards this end.

You can view a video of Maria's seminar and download the presentation slides and summary report here.

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