When the effects of the stabilization measures during Fujimori’s government were being discussed, an unusual news item appeared in the business section of El Comercio: on a panel of experts—the only one who wasn’t an economist—the late Monsignor Durand Flórez delivered a masterclass in economics, emphatically stating, “Drastic corrections are imperative; the fundamental issue is preventing the suffering of the poorest because of restoring macroeconomic equilibrium.” With these simple words, he was highlighting something that tends to be forgotten: the moral character of economics.

If only one individual existed in the world, that person would have exclusive power over all the resources and wealth in the universe. But, since other people exist, it is necessary for everyone to coordinate the best way to distribute wealth. There is an old example in economics that reflects this situation: if a community hunts a deer, to whom does it belong? To the strongest men who hunted it or to the weakest—children, women, and the elderly? Obviously, we are faced with a moral decision, in which, given the scarcity of wealth—a single deer—people must coordinate among themselves to find the fairest way to share it.

The criteria of justice are part of an ancient controversy that dates back to the origins of Western civilization: public ownership, where wealth is distributed equally among each of the members of the community, or, on the contrary, private ownership, in which the distribution is made according to the individual merits of the people.

For many studies, most notably Fukuyama’s controversial article, the debate ended with the failure of socialist utopias; humanity has irreversibly entered the End of History; societies will be composed of bored entrepreneurs and consumers trying to be as efficient as possible within the competitive landscape. Private property has proven far superior to collectivist forms of wealth creation and a better standard of living in those countries that opted for market economies. This is undoubtedly an easily verifiable fact. However, the problems of extreme poverty and inequality among certain economically disadvantaged groups, who require assistance, are not eliminated. These are the people to whom Monsignor Durand was referring when he reminded the bewildered economists and politicians of the importance of sharing the costs of that economic adjustment.

But “beware of paternalism,” warned another religious figure in Huamanga—Father Guillermo—who observed that when farmers were given food in soup kitchens, they neglected their work and didn’t bother to produce more, becoming complacent beggars waiting for a plate of food. The lesson from all this is clear: aid must be accompanied by the intention and desire for self-improvement, for example, by assigning small jobs that benefit the community.

Now that the famous theories of “growth with equity” are becoming fashionable in some media outlets, perhaps we should replace them with those of “growth with dignity”.

Juan Manrique Silva

References

LÉON WALRAS, Marie-Esprit. Compendium of Elements of Pure Political Economy. Ed. Abril Cultural. Sao Paulo. 1983

MARSHALL, Alfred. Principles of Economics Volume 1, Ed. Nova Cultural. Sao Paulo. 1986.

MARX, Karl. Manifesto of the Communist Party. Progress Publishers. Moscow. 1970.

MUNDELL, Roberto. Man and the Economy. Amorrotu Publishers. Buenos Aires. 1972.

SAMUELSON, Paul. Economics. 11th ed. McGraw-Hill. Spain. 1983.