Adam Smith’s Bourgeois Virtues in Competition

Whether or not capitalism is compatible with ethics is a long standing dispute. We take up an approach to virtue ethics inspired by Adam Smith and consider how market competition influences the virtues most associated with modern commercial society. Up to a point, competition nurtures and supports such virtues as prudence, temperance, civility, industriousness and honesty. But there are also various mechanisms by which competition can have deleterious effects on the institutions and incentives necessary for sustaining even these most commercially friendly of virtues. It is often supposed that if competitive markets are good, more competition must always be better. However, in the long run competition enhancing policies that neglect the nurturing and support of the bourgeois virtues may undermine the continued flourishing of modern commercial society

Tax Reform and the Dutch Labor Market: An Applied General Equilibrium Approach

This paper employs MIMIC, an applied general equilibrium model of the Dutch economy, to explore various tax cuts aimed at combating unemployment and raising labor supply. MIMIC combines modern labor-market theories, a firm empirical foundation detailed description of Dutch labor-market institutions. We develop a small aggregate model which contains the core of MIMIC, namely wage setting, job matching, labor supply demand. In addition to illustrating the main economic mechanisms in MIMIC shows the advantages of employing a larger, more disaggregated model that accounts for heterogeneity, institutional details, and more economic mechanisms. Targeting in-work benefits at the low skilled is the most effective way to cut economy-wide unemployment quality and quantity of labor supply. Cuts in social security contributions paid by employers and subsidies for hiring long-term unemployed reduce unskilled unemployment most substantially. Tax cuts in the higher tax brackets boost the quantity and quality of formal labor supply but are less effective in reducing unemployment and in raising unskilled employment and female labor supply.

On Rule of Law, Civic Virtues, Trust, and Happiness

In literature, there is a long and ongoing dispute over whether free market institutions encourage or discourage civic virtues. On the one hand, the so-called doux commerce thesis states that free market institutions have a favorable influence on civic virtues, such as honesty, respect for private property, and fair dealings. This idea goes back to, amongst others, Adam Smith who famously argued that where commerce is introduced, people are more faithful to their word. Smith also believed that civic virtues foster human happiness. The policy implication would be that free market institutions increase happiness by stimulating civic virtues. On the other hand, the so-called self-destruction thesis states that free market institutions are inimical to the civic virtues, which would mean that free markets decrease human happiness by crowding out civic virtues. Although the debate on free market institutions and civic virtues is very relevant to policy makers, empirical evidence on these opposing propositions is still scarce. In this paper we test both relationships on a sample of 212,431 individuals from 80 countries by using data from the World Values Survey and the European Values Survey over the 1990-2020 period. We focus on one important dimension of free market institutions: rule of law. We find that civic virtues are positively related to rule of law and that happiness increases with civic virtues. In addition, civic virtues indirectly increase happiness by stimulating trust. In addition, trust is directly positively related to rule of law, indicating that both formal institutions (rule of law) and informal institutions (civic virtues) affect trust. An analysis of all the effects of rule of law on happiness shows, however, that the indirect effects through civic virtues and trust are of relatively minor importance in comparison to its total effect

Religiosity, attitude and the demand for socially responsible products

In this paper, we examine the relationship between various Christian denominations and attitude and behavior regarding consumption of socially responsible (SR) products. Literature on the relationship between religiosity and pro-social behavior has shown that religiosity strengthens positive attitudes towards pro-social behavior, but does not affect social behavior itself. This seems to contradict the theory of planned behavior that predicts that attitude fosters behavior. One would therefore expect that if religiosity encourages attitude towards SR products, it would also increase the demand for them. We test this hypothesis for four affiliations (non-religious, Catholic, Orthodox Protestant, and Other Protestant) on a sample of 997 Dutch consumers, using structural equation modeling. We find that Christian religiosity, indeed, increases positive attitude towards SR products, except for the Orthodox Protestant affiliation. In accordance with the theory of planned behavior, attitude is found to increase the demand for SR products. We find no evidence of hypocrisy (in the sense that religiosity increases pro-social attitude without affecting behavior in the case of SR products) for any of the Christian denominations

Ethics and Economics

This textbook applies economic ethics to evaluate the free market system and enables students to examine the impact of free markets using the three main ethical approaches: utilitarianism, principle-based ethics and virtue ethics. Ethics and Economics systematically links empirical research to these ethical questions, with a focus on the core topics of happiness, inequality and virtues. Each chapter offers a recommended further reading list. The final chapter provides a practical method for applying the different ethical approaches to morally evaluate an economic policy proposal and an example of the methodology being applied to a real-life policy. This book will give students a clear theoretical and methodological toolkit for analyzing the ethics of market policies, making it a valuable resource for courses on economic ethics and economic philosophy. The Open Access version of this book, available at http://www.taylorfrancis.com, has been made available under a Creative Commons Attribution-Non-Commercial (CC-BY-NC) 4.0 license

Corporate Social Responsibility and SMEs

The world’s people and their leaders face a complex and multifaceted set of ‘eco-social questions’. As the productivity of humanity increases, the negative external environmental effects of production and consumption patterns become increasingly problematic and threaten the human welfare. As the regulating power of national and international governments is limited, this challenge has generated a strong interest in the corporate social responsibility (CSR) of companies. Firms find it increasingly important to meet the expectations of stakeholders with respect to the company’s contribution to profit, planet, and people. The primary aim of this book is to introduce the reader to the impacts and drivers of CSR, with a special focus on small and medium-sized enterprises (SMEs). Research into the social and environmental impacts of CSR is rare. This is a serious gap because if CSR were to fail to have favourable social and environmental impacts on society, the whole concept may become redundant. If societal impacts of CSR are substantial, it is important to know the drivers of CSR. This book considers (1) factors internal to the company, (2) the competitive environment of the company, (3) institutions external to the company, and (4) how the impacts of institutions are mediated or moderated by company internal factors. This book will fill this gap by estimating various types of models that integrate external and internal factors driving CSR and its impacts on environment, innovation, and reputation, making it a valuable resource for researchers, academics, and students in the fields of business management and CSR. The Open Access version of this book, available at http://www.taylorfrancis.com, has been made available under a Creative Commons Attribution-Non-Commercial (CC-BY-NC) 4.0 license

Op naar een nieuwe en sociale christendemocratie

Samenwerking of fuseren van het CDA en Omtzigts nieuwe partij NSC kan de christendemocratie redden, denkt Johan Graafland, hoogleraar economie, onderneming en ethiek aan de Tilburg University

Geloven in de hel maakt niet ongelukkig

De hel zou niet alleen een achterhaald idee zijn, maar mensen ook angst inboezemen met mogelijk traumatisering tot gevolg. Maar uit onderzoek blijkt dat er op wereldschaal maar weinig verband is tussen geloven in een hel en het geluk dat mensen ervaren, stelt Johan Graafland, hoogleraar Economie, Onderneming en Ethiek aan de Tilburg University