Source: Bahá'í Library Online (bahai-library.com), curated by Jonah Winters. Used by permission of the curator. Original citation: Gregory C. Dahl, New Directions for Economics, bahai-library.com. ────────────────────────────────────────────────────────────────────── New Directions croissance suffisant, la Maison universelle de justice a, dans un message qu’elle leur for Economics a adressé le 1er mars 2017, exhorté les croyants à se préoccuper de plus en plus des inégalités dans le monde et à veiller à GREGORY C. DAHL ce que leur vie personnelle et les actions de leurs communautés bahá’íes soient de plus en plus au diapason des normes mo- Abstract rales élevées et des principes de compas- Recent developments in both the Bahá’í sion et de service enchâssés dans les en- community and the field of economics seignements de leur foi. En même temps, have opened up new vistas in the appli- depuis la crise financière de 2007 2008 cation of Bahá’í principles to economic et la récession mondiale subséquente, qui questions, both in theory and in practice. ont révélé les lacunes des modèles mac- The Bahá’í community has grown enough roéconomiques que la profession avait that the Universal House of Justice, in construits au cours des décennies précé- its 1 March 2017 message, has called on dentes, la profession d’économiste s’ou- Bahá’ís to concern themselves increas- vre davantage à de nouveaux courants de ingly with the inequalities in the world pensée et de recherche. L’auteur examine and to bring their personal lives and the ici certains des champs les plus fertiles actions of their Bahá’í communities more pour l’application de principes bahá’ís aux in line with the high moral standards and problèmes économiques actuels. principles of compassion and service in the teachings of their Faith. At the same Resumen time, the economics profession is more Los desarrollos recientes tanto en la co- open to new directions of thought and munidad bahá’í como en el campo de la research following the financial crisis of economía han abierto nuevas perspectivas 2007–08 and the subsequent global re- en la aplicación de los principios bahá’ís a cession, which exposed the shortcomings las preguntas económicas, tanto en la te- of the macroeconomic models that the oría como en la práctica. La comunidad profession had spent the previous several bahá’í ha crecido lo suficiente para que decades constructing. Some of the fields la Casa Universal de Justicia, en su men- that appear most fertile for the application saje del 1 de marzo de 2017, pidió a los of Bahá’í principles to current economic bahá’ís que se preocupen cada vez más de problems are reviewed in this article. las desigualdades en el mundo y traigan sus vidas personales y las acciones de sus Résumé comunidades bahá’ís más en línea con los Des développements récents, tant dans la altos estándares morales y los principios communauté bahá’íe que dans le domaine de compasión y servicio en las enseñanzas de l’économie, ont ouvert de nouvelles de su Fe. Al mismo tiempo, la profesión de perspectives pour l’application théorique la económia está más abierta a nuevas di- et pratique des principes bahá’ís aux ques- recciones de pensamiento e investigación tions d’ordre économique. La communauté después de la crisis financiera de 2007-08 mondiale bahá’íe ayant atteint un niveau de y la posterior recesión global, que expuso 34 The Journal of Bahá’í Studies 28.1-2 2018 las deficiencias de los modelos macroeco- on Bahá’ís to engage in the discourses nómicos en la cual la profesión duro dé- of society and has encouraged them, cadas construyendo. Algunos de las areas as a natural result of their growth as que parecen más fértiles para la aplicación local communities, to address social de los principios bahá’ís a los problemas issues (Ridván 2008; Ridván 2010). . . económicos actuales se revisan en este Indeed, a major theme of the junior artículo youth spiritual empowerment pro- BACKGROUND gram pursued by Bahá’ís around the world is to sensitize youth ages 12 to Since I first attempted a survey of the 15 to the needs of their local commu- Bahá’í teachings on economics more nities and to encourage them to take than 40 years ago (“Economics and the initiatives aimed at improving the so- Bahá’í Teachings”) and some of the ar- cieties in which they live. eas within economics where the Bahá’í Recently, the Universal House of teachings could be fruitfully applied Justice has addressed a significant (“Evolving Toward a Bahá’í Economic message to the Bahá’ís of the World System”), there have, of course, been dated 1 March 2017 regarding the many changes in the Bahá’í communi- “extremes of wealth and poverty in ty as well as in the field of econom- the world [that] are becoming ever ics. The Bahá’í community has grown more untenable.” They call on Bahá’ís substantially both in numbers and in to identify ever more strongly with visibility. In those earlier years of the the plight of their fellow human be- Faith, Bahá’ís necessarily had to con- ings, as “[t]he welfare of any segment centrate primarily on building their of humanity is inextricably bound up Bahá’í communities rather than con- with the welfare of the whole,” and cerning themselves with the problems to increasingly “make their own indi- of society around them. Working to vidual and collective contributions to bring the teachings of their Faith to economic justice and social progress mankind held out the hope and expec- wherever they reside.” This call builds tation of addressing the causes of the upon a view enunciated in their earli- problems afflicting the human race, er messages, notably the Ridván . 2010 while, owing to their small numbers, message, that social change should any endeavors in direct social action involve everyone in society in a co- would have had only minimal effect. operative endeavor and can often be Despite a few notable efforts—for in- initiated at the level of the local com- stance, in the establishment of schools munity. Theirs is not just a simple call and in medical services—progress to charity but rather to “addressing with social and economic development the root causes” of poverty, a far more initiatives was limited. In more recent profound challenge. years, however, the Universal House How are Bahá’ís to meet this chal- of Justice has been gradually calling lenge? There is no specific economic New Directions for Economics 35 system prescribed in the Bahá’í Writ- material factors such as the lack of in- ings, but many of the teachings— come or wealth, and may spring from some of which are discussed below— the grass roots rather than emerg- bear directly on economic issues. ing top-down through government It would not be realistic to expect, programs. however, that the mere exposition of Indeed, Bahá’ís view all aspects of ideas will result in significant reform life as one interrelated whole, whether of economic systems. Humanity has considered from the perspective of the become too cynical and too distract- individual or the society, the spiritual ed by petty conflicts and the clamor or the material, the local or the glob- of opinions to pay much attention to al.1 Economics is only one aspect of, or idealistic pronouncements. And any perspective on, this whole, inseparable effort at systemic reform, even with from the rest, and solutions to “eco- a well-conceived plan of action, re- nomic” problems may well be found quires an enormous social impetus to in what we normally view as other overcome existing power structures aspects of life, such as religion, eth- and vested interests. ics, morality, and community building. The Universal House of Justice has Needless to say, this approach is quite been calling Bahá’ís to an entirely dif- different from the usual practice in the ferent approach to social progress, one academic field of economics. involving community building at the In his keynote address to the 2016 local level. They are now asking that annual conference of the Association this process of learning about commu- for Bahá’í Studies, former member of nity building be expanded to include the Universal House of Justice Dr. considerations of economic justice. Farzam Arbab suggested that Bahá’ís Bahá’ís are at an early stage of engag- in every field of endeavor should ex- ing with such broad social issues, but amine the work of their discipline they may well find that there are many and begin a process of identifying opportunities for individuals and local which aspects might be seen as useful communities to begin addressing the in the context of the Bahá’í teach- causes of inequities at a practical level, ings and which might not (15). Given starting not with economic or politi- cal theories but with their own actions 1 For example, the Universal House based on their observations of those of Justice warns against thinking in causes and motivated by their desire terms of “false dichotomies” and quotes to serve their communities. As a result a letter written on behalf of Shoghi Ef- of experience gained in this way, new fendi in which he states “[w]e must take methods of tackling social problems the teachings as a great, balanced whole” may emerge. These methods may in- (Message to the Conference of the Con- volve intangible factors such as social tinental Boards of Counsellors dated 28 attitudes and prejudices, rather than December 2010). 36 The Journal of Bahá’í Studies 28.1-2 2018 that social and political structures in time as misguided, and nothing that I the world appear to be crumbling, it have encountered since has changed would not be surprising if a large part that view. Human societies are not like of the intellectual underpinnings of machines. They are highly complex the present (dis)order, including the and unpredictable, and they evolve, field of economics, might need to be sometimes with sudden changes.2 In rethought, or even replaced. electrical engineering, one works with While the Bahá’í community has actual black boxes (integrated circuits been gradually increasing its involve- are almost always encased in black ment with economic issues, there has plastic boxes), but the way circuits simultaneously been turmoil within the behave is well understood and quite field of economics. When I began my precise, so the relationship between doctoral studies in economics at Har- inputs and outputs is highly stable vard in 1969, computers were new and and predictable.3 Economic systems, the ability to analyze data and draw con- clusions about relationships between 2 Economist Paul Ormerod emphasizes different variables was exciting. I was this viewpoint in his 1994 book, The Death coming from an undergraduate major of Economics, in which he writes: “We need in electrical engineering, and although to abandon the economist’s notion of the I was not the most outstanding student economy as a machine, with its attendant as an undergraduate, the Economics concept of equilibrium. A more helpful Department evidently was looking for way of thinking about the economy is to students with my background. Macro- imagine it as a living organism” (151). He economics was beginning what would also points out that, like natural systems, prove to be several decades of devel- economies are subject to unpredictable ex- opment of econometric models at- ternal shocks and sudden changes (211). tempting to measure and then predict 3 Tellingly, in contrast to engineering, the relationships between influences with its calculations that include known on the economy and how the economy margins of error, e.g., 232+/- 5, there is no would respond to those influences. The effort in the mathematics of economics to modeling, and thinking, was of an en- explicitly take into account the often very gineering mindset: in terms of mecha- large margins of error of the data that are nistic systems or “black boxes” whose used as inputs. Economic data usually de- internals were unknown but which rive from heterogeneous sources and are had inputs, such as “policy levers,” and subject to wide variations in quality and outputs, such as employment levels and accuracy. Anyone working with economic prices, that could be observed and pre- statistics understands the uncertainties in- dicted, much like the electrical circuits volved, but that understanding is often not I had been studying. preserved as the data are reported on by Coming from my engineering back- the press or used in models or as the basis ground, this approach struck me at the of policy decisions. New Directions for Economics 37 however, are not natural phenomena. but about how they change and can be They are created by human beings improved. as part of our social systems. In this Another problem I saw with eco- sense, economics could be considered nomics as a discipline was that it as overlapping with law, as many of was becoming far too isolated and the parameters of modern economic concerned only with its own models. systems are prescribed in laws and Macroeconomists tended to see the regulations and administered by insti- sometimes abrupt and unforeseen tutions that have legal charters. Just as shocks to economic systems as simply people often fail to obey other laws and “exogenous,” that is, outside the scope regulations, they often fail to obey eco- of their analysis and models, prefer- nomic “laws,” such as those governing ring to focus on the beautiful equilibria rational behavior. When economics predicted by their models. Essentially, is viewed in this way, it is clear that their view was that economics is a sep- economies are not smoothly function- arate discipline from political science, ing machines; rather, they reflect the psychology, medicine, anthropology, characteristics of humans, including or any other discipline, and econo- emotions, irrationality, herd behavior, mists could not be expected to take all and the need to understand complex these other factors into account. This realities through simplifications. rather isolationist attitude was a major In fact, the economic system, in- departure from the earliest practice cluding modern money, doesn’t exist of macroeconomics, which was often at all except as social contracts and called “political economy” and which mental constructs. As member of took a much more holistic view of hu- the Universal House of Justice Paul man society.4 Lample has noted, “most of what we perceive to be reality—the world with 4 Adam Smith, who is primarily re- which we interact every day—is not membered today for the assertion that physical reality at all. It is social re- self-interested behavior would lead to eco- ality” (7). ‘Abdu’l-Bahá remarked that nomic prosperity through the “invisible “[t]he reality of man is his thought” hand” of the market, was also famous in (Paris Talks 9). Indeed, almost all the his time as a philosopher and for his book problems and issues that humanity is The Theory of Moral Sentiments (Ormerod facing in today’s world are created by 212). Nava Ashraf has written about the humans and are thus part of “social parallels between his views and the find- reality.” This reality, having been cre- ings of both modern psychology and be- ated by humans, is not immutable and havioral economics, pointing out that, in can be changed or even completely re- Moral Sentiments, “Adam Smith’s world made by them. So, the most important is not inhabited by dispassionate rational questions about economic systems are purely self-interested agents, but rather not about their internal parameters by multidimensional and realistic human 38 The Journal of Bahá’í Studies 28.1-2 2018 My reactions to the field were also digression in the work of most aca- informed by my Bahá’í upbringing. As demic macroeconomists. a Bahá’í, I saw the human experience While the mainstream of macro- as a highly integrated whole, with economics was moving in a different spiritual dimensions as well as material direction, a few isolated voices main- ones. Thus, like other people profess- tained a social consciousness per- ing religious values, I saw analysis of spective within the field over these economies as normative and not just decades, emphasizing the inequalities positive. For me, the interesting ques- and injustices that are inherent in the tions were what an economic system capitalist system. For example, Ste- should look like, not so much what the phen Marglin has been teaching an present systems looked like, although alternative (or “heterodox”) economics understanding the latter would nat- course for undergraduates at Harvard urally be a prerequisite and basis for for some years and has written a book conceptualizing possible futures and titled The Dismal Science that empha- how such futures could be achieved sizes the importance of community, in practice. And any consideration of a direct challenge to mainstream eco- economic problems would need to in- nomics.5,6 The principal shortcoming clude questions such as whether ma- of such critiques of capitalism, how- terial consumption is really the main ever, has been the lack of convincing source of human happiness and how alternatives, given that the socialist moral and spiritual values should be experiments of the twentieth century reflected in economic systems, go- collapsed spectacularly from serious ing far beyond simple questions of inefficiency and corruption and that the level of economic output and its capitalist systems have already incor- distribution. porated many socialist elements of Given these various misgivings social protection and welfare. Tearing about the field of economics, I was down one intellectual structure is not very happy to be able to pursue a ca- the same as building a new one. reer as an economist at the Interna- During this time, more and more tional Monetary Fund (IMF), engaged economists also began examining the in real-world policy issues facing countries—issues usually more politi- 5 See also his talk “Heterodox cal than economic in nature, involving Economics”. simple accounting relationships rath- 6 I am personally indebted to Professor er than complex economic relation- Marglin for his required microeconomics ships. In this way, I was able to avoid course, one of the first I took as a graduate what I felt was a relatively fruitless student at Harvard, which helped protect me from the 40-year detour into mathe- beings” (Ashraf, Camerer, and Loewen- matical abstractions upon which the field stein 142). of economics was embarking at that time. New Directions for Economics 39 weaknesses in the “orthodox” or “neo- credit and the concomitant contraction classical” economic theories and made in economic activity, revealed for all to efforts to modify or extend those the- see that many of the assumptions un- ories—for example, by introducing derlying macroeconomic models were the possibility of multiple equilibria unrealistic and that reliance on these in their models. Younger economists models and similar methods of finan- tended to move into microeconomic cial analysis based on historical data, fields of inquiry such as health, educa- such as value at risk (the statistical tion, and behavioral economics, where method by which banks would assess the restrictive assumptions of the neo- the riskiness of their assets), had failed classical view of economic man as a to anticipate or prevent an enormously utility-maximizing machine didn’t ap- costly economic downturn. Illustrat- ply and greater integration with other ing the hit to the reputation of the disciplines was possible. Perhaps as a economics profession generally, Queen result of the obvious weaknesses in the Elizabeth, after hearing a briefing on neoclassical framework for addressing the financial crisis in November 2008, current economic problems, the field famously asked, “Why did no one see it of economics has also been moving coming?” (Giles). away from pure theory, or theory with This obvious failure has prompted simulations, and toward more empir- a certain amount of soul searching ical work (Hamermesh 168). Econ- among leading economists and policy- omists have taken the analytic tools makers. In March 2013, at a London of their profession and applied them School of Economics seminar in honor to a wide variety of interesting but of Mervyn King, the retiring Bank of narrower questions, as popularized in England governor, Olivier Blanchard, the 2005 book Freakonomics by Steven economic counselor of the IMF, said, Levitt and Stephen Dubner. However, “Humility is in order,” and Professor the result has been that less attention Lawrence Summers of Harvard Uni- is being paid to the big structural and versity, former Treasury secretary of policy questions of macroeconomics the United States and former presi- that used to be the main focus of the dent of Harvard, said, “This crisis will field, such as economic justice, employ- force a substantial reconstruction of ment, growth, trade, global integra- macroeconomics” (London School of tion, economic and financial stability, Economics). It had become apparent and curbing abuses of the free market that the macroeconomic models econ- economy such as monopoly power and omists had spent most of their time pollution. formulating had been calibrated with Then, in 2007–08, events gave a big data covering a period of relative fi- impetus to these trends. The global nancial stability, that financial crises financial crisis, with its collapse of were actually much more frequent and important financial institutions and severe than assumed (Taleb), and that 40 The Journal of Bahá’í Studies 28.1-2 2018 most models failed to incorporate the new directions, a space has opened up financial sector at all, although prob- for more innovative approaches. lems arising from finance turned out Perhaps the solution to these prob- to be a much more important cause lems in the economics profession lies of economic shocks and decline than in the recognition that economic sys- the loss of output due to imperfect tems cannot be fruitfully studied as fine-tuning of economic cycles (Broad- isolated from other aspects of human berry and Wallis). While econometric society (Etzioni). The barriers be- models are now still being used, they tween economics and other fields of are being treated with more caution study, and between economists and in policy circles. Of course, it is still the general public, need to be further useful to study macroeconomic rela- demolished. There seems to be a nat- tionships in terms of cause and effect, ural tendency for specialists in every such as what the likely impact on an field to develop their own vocabulary, economy would be from raising inter- perhaps as an insecurity-fueled de- est rates or adjusting tax laws. People fense mechanism, to keep others from respond to incentives as well as laws, seeing clearly the weaknesses of the and this is the essence of public pol- discipline (as when doctors refer to icy. But it is now increasingly recog- “nosocomial infections,” diseases that nized that these relationships are not are contracted primarily in hospitals). as stable and predictable as previously Certainly, economics has its share of thought, that there can be huge gaps such specialized language. Although between economic models—both it is hard to know whether this phe- calculated models and those mental nomenon is greater in economics than frameworks by which we make sense in other fields, perhaps the resentment of the world—and real-world out- of outsiders to the sense of superior- comes. For example, a current issue ity many economists exhibit may be of considerable importance is that the due to the fact that everyone is direct- models used by Western central banks ly affected by economic policies and to guide their policy decisions—re- therefore naturally wishes to under- garding the links between monetary stand better the forces that are affect- policy and the response of prices and ing them. This effect would be much economic activity—are not yielding less noticeable in, say, archeology or the expected results, calling into ques- astronomy, but it is clearly visible in tion the entire framework of mone- fields such as medicine that are simi- tary policy (Yellen). The realization lar to economics in their relevance to that the existing models may not be daily life. correct presents a fundamental chal- While the field of economics has lenge to the accepted concepts in the been facing internal challenges, on a field of macroeconomics, and while larger stage recent turmoil in nation- the field has already started to move in al politics in a number of important New Directions for Economics 41 countries, resulting from growing SOME BASIC BAHÁ’Í PRINCIPLES dissatisfaction with the status quo on the part of large segments of the A central principle of the Bahá’í Faith, population, is also providing an im- “the pivotal principal and fundamental petus to question current economic doctrine of the Faith,” is the principle and political systems and to consider of the oneness of the entire human far-reaching reforms. As the respected race (Shoghi Effendi, God Passes By chief economics commentator of the 281). Bahá’u’lláh declared that “[y]e Financial Times, Martin Wolf, wrote are the fruits of one tree, and the leaves recently, “It is time for re-thinking of one branch . . . . So powerful is the along many dimensions” (11). light of unity that it can illuminate the Against this background of a gen- whole earth” (Epistle 14). This princi- eral questioning of existing social ple has many dimensions and ramifi- structures, and of the need to break cations. As the Universal House of down the barriers between economics Justice has observed: and other disciplines and to work to- ward an inclusive process of the gen- For the principle of the oneness eration, dissemination, and application of humankind, as proclaimed by of knowledge, this article is addressed Bahá’u’lláh, asks not merely for to anyone interested in the issues dis- cooperation among people and cussed, not just to professional econ- nations. It calls for a complete omists. What I will attempt below is reconceptualization of the rela- a brief and somewhat superficial re- tionships that sustain society. . . . view of a few of the numerous areas [T]he concentration of material in the fields of economics and public wealth in the hands of a minority policy that are the subject of current of the world’s population gives an debate—areas where fresh work and indication of how fundamentally innovation benefitting from a Bahá’í ill-conceived are relationships perspective could make a positive con- among the many sectors of what tribution. The focus is on topics with is now an emerging global com- a potential for immediate applicability munity. The principle of the one- or experimentation, rather than sub- ness of humankind implies, then, jects, intellectually interesting as they an organic change in the very are, such as the outlines of the Bahá’í structure of society. (Message to World Commonwealth of the future, the Bahá’ís of Iran) for which new political structures will be necessary. Before turning to this In this light, can we study economics endeavor, however, let us summarize a without considering economic justice? few of the relevant Bahá’í principles, Aside from socialists, Western which may serve as a rich resource and economists have traditionally separat- source of inspiration. ed the question of maximizing output, 42 The Journal of Bahá’í Studies 28.1-2 2018 considered the main objective of eco- participation. Thus, while social action nomics, from the question of the dis- may involve the provision of goods tribution of that output of which, as and services in some form, its prima- mentioned above, they prefer to think ry concern must be to build capacity as a political rather than an economic within a given population to partici- issue. The concept of the oneness of pate in creating a better world. Social humankind, on the other hand, em- change is not a project that one group phasizes the need of a social structure of people carries out for the benefit of that encourages each individual to re- another.” alize his or her own potential and to This theme of capacity building7 is be a contributing member of society, also developed at length in the docu- which in turn will augment the gener- ment “Social Action,” prepared at the al happiness and prosperity of society request of the Universal House of as a whole. As ‘Abdu’l-Bahá has stated, Justice in 2012, in which they state: “Wealth is most commendable, pro- “What appears to be called for . . . is vided the entire population is wealthy” the involvement of a growing num- (Secret 8). The question then becomes: ber of people in a collective process What might the economic system of of learning . . . . Such a process would such a society look like? When we allow its participants to engage in the consider this question, can we avoid generation, application, and diffusion falling into the trap of framing the of knowledge, a most potent and in- debate in terms of socialism versus dispensable force in the advancement capitalism or as a struggle between classes? Can we imagine a new type of 7 An example of the importance of society, one characterized by reciproc- capacity building is ‘Abdu’l-Bahá’s encour- ity and mutual help? agement early in the twentieth century of In the Bahá’í view, and in keeping the Bahá’ís in North America to build a with this principle of the oneness of house of worship, not primarily because humanity, efforts to improve human such a building was needed at that time (it welfare must be seen as a collective took many years to construct), but because enterprise, with everyone participat- it was a project around which, He insist- ing in some fashion, and thus the es- ed, the whole community needed to unite, tablishment of a sense of unity must learning to work together toward a com- be a first step. As the Universal House mon objective. The committee charged of Justice communicated in its 20 Oc- with overseeing the project was called tober 1983 message to the Bahá’ís of the Bahá’í Temple Unity. The spirit in the world, “The key to success is uni- which the project was conducted and the ty in spirit and in action.” This theme motives of the individuals involved were was also stressed in its annual Ridván . as important as the outward form of the message to the Bahá’ís of the world project, and the main purpose was capaci- in 2010: “Justice demands universal ty building in the community. New Directions for Economics 43 of civilization” (OSED 6). Further- words and end with words” (Tablets 52). more, in the 2010 message of the Uni- Intellectual accomplishment, how- versal House of Justice quoted above, ever, should not lead to a sense of they state: “Access to knowledge is the entitlement or superiority (Arbab 17). right of every human being, and par- Economists, like other intellectuals, ticipation in its generation, application tend to see themselves as playing a and diffusion a responsibility that all central role in society. In the case of must shoulder in the great enterprise economics this may be true, because of building a prosperous world civili- economies are defined by rules, and zation—each individual according to those rules, or government policies, his or her talents and abilities.” are often based on the theories or So what, then, is the role of experts influence of economists. But just as and intellectuals in the Bahá’í view? one wants a highly trained surgeon Bahá’u’lláh writes that those who ac- working in a well-equipped hospital quire knowledge should be respected to perform open-heart surgery, and it (Gleanings 128; Tablets 96–97), but the is also desirable for the general public Bahá’í teachings see the generation to be well-informed about health, nu- and acquisition of knowledge, like trition, and disease and to have ready other human activities, as something access to information in these fields, so in which everyone should take part, well-trained economists are needed to not as the exclusive domain of experts address complex problems of public or a particular social class. Bahá’u’lláh policy and the functioning of financial further states: “Knowledge is one of institutions, while the general public the wondrous gifts of God. It is in- should understand the principles of cumbent upon everyone to acquire it” economic life and should be encour- (Tablets 39). And again: “Knowledge is aged to take initiative if they are so as wings to man’s life, and a ladder for inspired. Knowledge should be avail- his ascent. Its acquisition is incumbent able to all, not confined to a privileged upon everyone” (Tablets 51). Univer- few. The challenge, of course, is how sal education open to all is a central to get different groups to communi- principle of the Faith, applied since cate effectively with each other and to the earliest days of the Faith in Iran benefit from each other’s perspectives and in the present day in many areas (Ashraf). of the world through the founding It is notable in this context that the of local schools if none are provided 1 March 2017 message of the Univer- by the state. The Bahá’í vision, then, is sal House of Justice calls on all Bahá’ís, one of individuals acquiring whatever as individuals and in their communi- knowledge they can, given their abili- ties, to consider the problems of ineq- ties and access to education, as long as uity and injustice around them and do that knowledge “can profit the peoples what they can to address those prob- of the earth” and does not “begin with lems “using the opportunities their 44 The Journal of Bahá’í Studies 28.1-2 2018 circumstances offer them” (Message individuals dedicated to labouring to the Bahá’ís of the World). There is together for the emergence of a no mention of waiting for an expert to united and prospering world that tell them what to do. But there is also might truly deserve to be called no reason why they shouldn’t consult the kingdom of God on earth. with an expert if it would be helpful. (Message to all who celebrate As the Office of Social and Econom- the Glory of God dated October ic Development (OSED) at the Bahá’í 2017) World Center has observed, “Social and economic development requires The message of the Universal the flow of resources, both material House of Justice of 1 March 2017 and intellectual” (11). also highlights the “foundational con- As an aide in understanding the cept” in Bahá’u’lláh’s Revelation of dynamics of social progress, the “the spiritual reality of man,” namely Universal House of Justice has also “the nobility inherent to every human introduced the concept of three pro- being” (Message to the Bahá’ís of the tagonists in development: the indi- World). Like other religions, the Bahá’í vidual, the community, and institu- Faith views man as having a higher, tions (Message to the Bahá’ís of the nobler nature characterized by altru- World dated 26 November 1999 1). ism, integrity, generosity, forgiveness, Each has an essential role to play. As and many other virtues, a view that explained in the OSED document on emphasizes man’s character and role “Social Action” mentioned above, “the in society. Importantly, in this view increase of capacity in each of these human behavior is not, and should not three protagonists does not occur in be, something static. On the contrary, isolation; the development of any one it sees human beings as able to learn, is inextricably linked to the progress progress spiritually, and strive to be- of the other two” (8). The House of come better by developing inherent Justice has emphasized, in particular, qualities. Even if, for the individual, that those who have previously been the ability to develop slows with age, excluded must now be included and society can progress through educa- should become empowered to contrib- tion so that each generation is more ute to this process: developed and capable than the pre- vious one, and mankind thereby fos- Many who have long suffered are ters “an ever-advancing civilization” finding their voice and becoming (Bahá’u’lláh, Gleanings 215). protagonists of their own devel- Thus, a Bahá’í view of the economic opment, resourceful and resilient. dimension of human society contrasts From villages, neighbourhoods, starkly with the view central to most towns and cities are arising in- economic thinking—namely, that hu- stitutions, communities, and man motivation is primarily based on New Directions for Economics 45 self-interest and that this condition is to an integrity that is immune to the static and simply “human nature.” It promptings of self-interest” (Compila- sets forth a concept of the individu- tion of Compilations 342). al as an inherently social being, one More generally, Bahá’ís and the thus influenced by social context and followers of the other major faiths collective incentives, but always in a believe that personal or spiritual qual- condition of changing and growing, ities such as honesty, integrity, humil- potentially serving as an agent of so- ity, selflessness, commitment to stable cial change in a reciprocal relationship family relationships, a desire to serve with society. others, a dedication to peaceful resolu- This brings us to the importance tion of conflicts, and a consciousness of trust. The glue that holds society of spiritual preparation for the next together is trust. No society can long life as opposed to material rewards in function successfully without trust this one are of central importance to and altruism.8 There is now a growing the successful functioning of human concern in the world regarding the society, including its economic aspects. decline in trust in social institutions. In the Bahá’í view, the detachment of Unfortunately, we nevertheless see un- modern societies from these core spir- trustworthy people rising to positions itual truths is the main reason for the of great power and influence in society, breakdown in social structures and notably in the political, financial, and cohesion and to the successive crises business worlds. Hardly anyone actual- being faced by humanity. ly expects politicians to speak only the An important general principle truth these days. Young people might here is that man is a social creature thus quite reasonably assume that be- and society depends on cooperation ing dishonest is the easiest path to suc- and reciprocity, not competition. As cess. In contrast, there are many pas- ‘Abdu’l-Bahá explains: “man cannot sages in the Bahá’í writings regarding live singly and alone. He is in need the importance of trustworthiness and of continuous cooperation and mu- truthfulness, such as the following ex- tual help. For example, a man living hortation of ‘Abdu’l-Bahá to those in alone in the wilderness will eventu- public service positions: “In discharg- ally starve. He can never, singly and ing the functions of the office to which alone, provide himself with all the thou hast been appointed, thy con- necessities of existence. Therefore, duct and actions should attest to the he is in need of cooperation and rec- highest standard of trustworthiness iprocity” (Promulgation 102.2). In the and honesty, to a degree of sincerity Bahá’í view, the emphasis in much that is altogether above suspicion, and modern economic and social science thinking on competition as the key to 8 This theme is developed in my arti- prosperity is entirely misplaced (Karl- cle “Trust and Trustworthiness.” berg). Rather, prosperity comes from 46 The Journal of Bahá’í Studies 28.1-2 2018 collaboration and from a sense of rec- status of fact or define truth as iprocity resulting in equitable sharing. the compromise between oppos- In this view, for example, economic ing interest groups. (Message to structures should emphasize the mu- the Bahá’ís of Iran) tual interdependence of labor and cap- ital, with the interests of each, as well Beyond simply recognizing that as the broader social interest, taken human beings are social creatures, the into account (‘Abdu’l-Bahá, Promulga- Bahá’í teachings take the Golden Rule tion 102.33). a step further and emphasize service to In this regard, a key practical ap- others as being the path to individual proach enjoined by Bahá’u’lláh is the spiritual growth as well as the prog- principle of consultation. For Bahá’ís, ress of society. As Bahá’u’lláh writes, consultation means sharing one’s ideas “Man’s merit lieth in service and vir- in a group while being detached from tue and not in the pageantry of wealth them and listening closely to what oth- and riches” (Tablets 138). ‘Abdu’l-Bahá ers contribute so that the truth can be further declares: “And the honor and found and agreement can be reached distinction of the individual consist on the best way forward. Bahá’u’lláh in this, that he among all the world’s writes: “Take ye counsel together in multitudes should become a source of all matters, inasmuch as consultation social good” (Secret 1). is the lamp of guidance which leadeth Part of being a productive member the way, and is the bestower of under- of society is to have an occupation and standing” (Tablets 168). ‘Abdu’l-Bahá earn a living, within the means and exhorts: “Settle all things, both great opportunities available. ‘Abdu’l-Bahá and small, by consultation. Without writes: “Every person must have an prior consultation, take no import- occupation, a trade or a craft, so that ant step in your own personal affairs. he may carry other people’s burdens, Concern yourselves with one another. and not himself be a burden to others” Help along one another’s projects and (qtd. in Universal House of Justice, plans” (Research Department). And Message to the Bahá’ís of the World the Universal House of Justice has dated 1 March 2017). In fact, we read written that decision-making can in Bahá’u’lláh’s book of laws that: “It is incumbent upon each one of you to benefit from a diversity of per- engage in some occupation—such as a spectives through a consultative craft, a trade or the like. We have ex- process which, understood as the alted your engagement in such work collective investigation of reality, to the rank of worship of the one true promotes detachment from per- God” (Kitáb-i-Aqdas ¶33). In a note, sonal views, gives due importance the Universal House of Justice ex- to valid empirical information, plains that the implementation of this does not raise mere opinion to the law is “the mutual responsibility of the New Directions for Economics 47 individual and society” (Kitáb-i-Aqdas in the Bahá’í view, no material or eco- note 56). So work is seen not only as nomic act can be separated from its a material necessity, but as a spiritual moral and spiritual implications, and exercise as well, in that it confirms the economic systems need to be viewed individual’s dignity as a contributing in the light of spiritual standards and member of society, no matter how objectives. As the Universal House of lofty or meagre one’s particular role Justice affirms: “The teachings of the or station might be. Bahá’u’lláh has Faith leave no room for doubt: there poetically summarized this principle is an inherent moral dimension to the in The Hidden Words: “The basest generation, distribution, and utiliza- of men are they that yield no fruit on tion of wealth and resources” (Mes- earth. . . . The best of men are they sage to the Bahá’ís of the World dated that earn a livelihood by their calling” 1 March 2017). (Persian nos. 81–82). One example of this perspective In the Bahá’í teachings, in contrast is the unique and interesting law of to the attitudes and practices of many Huqúqu’lláh ordained by Bahá’u’lláh other faiths, money and wealth are not in his Most Holy Book (Kitáb-i-Aqdas seen as in conflict with a spiritual life ¶ 97). In addition to extoling charity, but rather as part of a coherent life— He decreed that those Bahá’ís whose that is, if one’s wealth is “acquired income exceeds their needs must pay by an individual’s own efforts” and is nineteen percent of the excess to the “expended for philanthropic purposes” Center of the Faith, in a spirit of “the or “upon themselves and upon their utmost joy and radiance” to be ex- kindred for the love of God” (‘Ab- pended for the betterment of human- du’l-Bahá, Secret 8; Bahá’u’lláh, The kind (Huqúqu’lláh no. 5). Bahá’u’lláh Hidden Words, Persian no. 82). As has stated that these payments of the Universal House of Justice states, Huqúqu’lláh “purify” one’s wealth “The oneness of mankind, which is at (Kitáb-i-Aqdas ¶ 97). Thus, the indi- once the operating principle and ulti- vidual can feel at peace spiritually if he mate goal of His Revelation, implies prefers to keep the remaining 81 per- the achievement of a dynamic coher- cent. The law encourages Bahá’ís to ence between the spiritual and prac- think of wealth as a means of promot- tical requirements of life on earth” ing social good while helping them (Message to the Bahá’ís of the World be detached from such wealth, and it dated 20 October 1983 602).9 Thus, focuses their attention on what is truly “needful” materially in their lives. 9 For an excellent statement on coher- As another example of how prac- ence between the spiritual and the materi- tical matters intersect with spiritual al, see http://www.bahai.org/beliefs/god- principles in the Bahá’í teachings, his-creation/ever-advancing-civilization/ Bahá’u’lláh has specified that the coherence-between-spiritual-material. charging of interest is permitted, in 48 The Journal of Bahá’í Studies 28.1-2 2018 contrast to other faiths, but He warns system. Bahá’u’lláh has given us a against “illicit gains obtained by usu- few basic principles which should ry” and counsels “moderation and fair- guide future Bahá’í economists ness,” “justice,” and “tender mercy and in establishing such institutions compassion” (Tablets 133–34). Similar- which will adjust the economic ly, in many passages He extolls for- relationships of the world. bearance, presumably using the word (Hornby 551) in its broader sense of showing pa- tience and resignation and not always Economists inspired by the Bahá’í insisting on one’s rights but perhaps teachings may study such issues as tax- also in its narrower meaning of being ation, trade, the financial system, and lenient regarding the repayment of public policy in general, about which loans if repayment would entail hard- some thoughts are presented below. ship. He has also prohibited gambling However, they might be well-advised but did not elaborate (Kitáb-i-Aqdas ¶ to keep in mind that there are already 155). Therefore, it is for the Universal many worthwhile ideas for improving House of Justice to determine in the economic systems, but vested inter- future whether this prohibition might ests and the failings of political sys- include speculation in financial mar- tems stand in the way of implement- kets (Kitáb-i-Aqdas note 169). ing them. Although it might be useful Although there are some specific to prepare the ground intellectually teachings of the Bahá’í Faith, such as for reforms, most have little prospect those mentioned above, that could be of being implemented any time soon. considered economic in nature, there In this context, the emphasis placed is no economic system per se envis- at this time by the Universal House aged in the writings of the Faith. In of Justice on individual and commu- a letter written on his behalf, Shoghi nity action is most interesting. As Effendi states: they explain in their message to the Bahá’ís of the world dated 1 March There are practically no technical 2017, “The aim is to learn about how teachings on economics in the to participate in the material affairs Cause, such as banking, the price of society in a way that is consistent system, and others. The Cause with the divine precepts and how, in is not an economic system, nor practical terms, collective prosperity can its Founders be considered can be advanced through justice and as having been technical econo- generosity, collaboration and mutual mists. The contribution of the assistance.” Faith to this subject is essentially There is much work to be done to indirect, as it consists in the ap- better understand how this process plication of spiritual principles might unfold. to our present-day economic New Directions for Economics 49 PROMISING NEW DIRECTIONS at the London School of Economics, has contributed to this field through Let us now turn to some specific areas high-profile empirical research con- that are currently the subject of in- firming a theory that people may tense policy debate because the short- voluntarily choose to limit their own comings of the present system are options—for example, through a bank becoming apparent, areas where in- savings product that would restrict novations, experimentation, insights, their withdrawals until they reached and research, informed by Bahá’í prin- a given level—contradicting a basic ciples, might be particularly fruitful. premise of neoclassical economics that people know what they want and NEW PERSPECTIVES ON HUMAN that choice is always better.11 NATURE Ashraf has more recently been do- ing pioneering work in her study of As mentioned above, the foundations altruistic behavior, confirming a view of modern macroeconomics have of human behavior in line with Bahá’í been increasingly called into question, principles but startlingly different leading to more attention being paid from the one traditionally assumed to microeconomics, or the study of in the economics profession. She has the behavior of individuals and firms, shown that altruism not only is im- and in particular to drawing conclu- portant, but can be a greater motiva- sions from observing actual behav- tion than monetary reward (Ashraf, ior. Important work has been done Bandiera, and Jack). While economists in many areas, such as game theory in recent years have extended the idea and bargaining, limited information, and agency theory, that challenges the 11 See in particular “Tying Odysseus restrictive assumptions of the neo- to the Mast: Evidence from a Commit- classical models of human behavior. ment Savings Product in the Philippines.” This shift in emphasis has moved what Behavioral economics is now perhaps is now called behavioral economics to most famous for the idea that people can center stage, with four Nobel Prizes be encouraged to make choices that are in the past 15 years being awarded better for themselves and/or society by to pioneers and contributors to this adjusting the way choices are presented to field.10 Nava Ashraf, a young Bahá’í them, e.g., by making the default option in behavioral economist previously at their paycheck involve putting part of it the Harvard Business School and now into a savings plan, rather than requiring them to opt for such an option. This idea 10 These Nobel Prize winners include was popularized in Richard Thaler and Daniel Kahneman (a psychologist) and Cass Sunstein’s 2008 book, Nudge: Im- Vernon Smith in 2002, Robert Shiller in proving Decisions About Health, Wealth, 2013, and Richard Thaler in 2017. and Happiness. 50 The Journal of Bahá’í Studies 28.1-2 2018 of human preferences to include vari- alongside GDP and economic growth, ous aspects of altruism, fairness, and and there is even an OECD Better values, these preferences have been as- Life Index, the difficulty of defining sumed to be fixed in line with the neo- and measuring happiness has proven classical model of behavior. Ashraf an obstacle, and little practical prog- has now introduced the notion, in a ress has been made. This field appears formal model, that altruism can be de- ripe for further investigation, perhaps veloped, which, from the perspective drawing on data from the experience of ethics and moral philosophy and of Bahá’í communities. of the Bahá’í teachings, is, in fact, of central importance (Ashraf and Ban- THE ELIMINATION OF PREJUDICE diera 70–75). Her work is an excellent AND THE RECOGNITION OF GENDER example of how someone approaching EQUALITY a field of study with a different per- spective can see a different reality and Prejudices of all kinds that divide cast new light on important issues. society into distinct groups and treat Related to the concept of altru- different groups unequally are the ism is the Bahá’í principle mentioned antithesis of the Bahá’í principle of above that the purpose of human life the oneness of humankind. So too is “service and virtue,” and that happi- are barriers to the full participation ness and fulfillment lie not in material by women in both economic activity possessions and pursuing self-interest and in social structures the antithesis but in service to others and leading a of the Faith’s teaching that women meaningful life. The new field of “hap- and men are equal in the sight of piness economics” addresses ques- God. Despite the progress that has tions of this nature, such as whether been made in recent decades, perni- wealth increases happiness and what cious prejudices are still rampant in other factors might produce happi- the world and not only perpetrate in- ness and a sense of well-being. In his justices, but also impede the general 2005 book Happiness surveying the progress of humanity. Bahá’ís, with subject, Richard Layard emphasizes their vision of a society characterized man’s social nature—that happiness by unity in diversity (Shoghi Effendi, comes from social connections such World Order 41–42), should be trail- as friendship and marriage—and also blazers, as individuals and in their observes that “happiness depends on communities, in demonstrating how your inner life as much as on your out- divisions can be overcome and unity er circumstances,” on “feel[ing] more firmly established. This is the essence for others” and on our “inner strength of the community-building projects of character” (230). While there has in which Bahá’ís and their collabo- been some effort to make happiness an rators are engaged and which surely official objective of government policy will yield lessons for the path toward New Directions for Economics 51 the economic prosperity and social Of course, this seems highly unlikely progress of humankind. to happen any time soon. There is also the issue of whether the resources thus INEQUALITY raised would be effectively used to al- leviate poverty. Redistribution schemes Economic inequality, and in particular and foreign aid have a poor record of the startling increase in affluence of actually promoting equality or de- the very rich at the expense of the mid- velopment. Many social programs in dle classes in recent years, has moved wealthy countries, although well-inten- center stage in political and economic tioned, have been found to perpetuate debate in many Western countries. Ox- poverty or to have other negative social fam announced during the 2017 World effects, and foreign aid programs have Economic Forum that their research been widely criticized as both ill-con- showed that eight individuals owned ceived and supportive of corruption in as much wealth as the poorer half of recipient countries. mankind (“Just 8 men”). Although one With regard to the question of how can question their methodology, the best to provide support for the poor overall picture is of profound concern. and needy, an option that is being in- French economist Thomas Piketty, af- creasingly discussed is the idea of a ter fifteen years of research, published universal basic or minimum level of fi- his long academic study Capital in the nancial support for all citizens. Because Twenty-First Century in 2014, and it of the difficulty of targeting income reached number one on the New York maintenance schemes only to those Times best seller list for hardcover non- truly in need, and without undermin- fiction, reportedly selling over 2.5 mil- ing incentives to seek gainful employ- lion copies and presumably breaking ment, the universal basic income would records for the sale of any 700-page ac- simply be given to all citizens. It was ademic tome (“Hardcover Nonfiction”; put to a public vote in Switzerland in Irvine).12 The rise in inequality is often 2016 (but failed by a large margin), is mentioned as one of the causes of the being pilot-tested on a limited scale in loss of public confidence in political a number of places such as Finland and leadership in some countries, and there Ontario, Canada, and is being promot- has been concern that it is leading to ed elsewhere, including by politicians. greater social instability. However, such schemes do not current- Piketty’s proposed solution—typical ly appear affordable even in most of the for an economist—is to impose new richest countries, as compared with tar- taxes on the rich to promote equality. geted assistance, although the experi- ments with this approach are worth fol- 12 Another influential writer on in- lowing (OECD, “Basic Income” 4, 6).13 equality is Branko Milanovic. See in par- ticular his book Global Inequality. 13 For a detailed treatment of this 52 The Journal of Bahá’í Studies 28.1-2 2018 All the above approaches to in- In the same vein, the 1 March 2017 equality are what is often called message of the Universal House of “top down” rather than “bottom up,” Justice puts the issue in an entirely i.e., directed from a central author- different light as compared with the ity rather than springing from the normal view of economists, framing it grass roots. To succeed, approaches as a moral, and thus personal, impera- to inequality may need to give much tive and not just a political or econom- greater weight to building a spirit ic question to be addressed by social of community at the local level, like institutions or public policy.15 Individ- the small, intimate “study circles” in uals and small communities motivated which Bahá’ís of different levels of by a moral standard taught by their re- experience read the Bahá’í writings ligion can improve their behavior even together and share their understand- before the political structure or eco- ings as equals, in sharp contrast to nomic incentives to do so are changed. the format of sermons, lectures, or As urged by the Universal House of the use of media typical in other re- Justice, Bahá’ís can attempt to identify ligions and institutions of learning. local causes of inequality and address It is noteworthy that an anti-poverty them with the means at their dispos- scheme incorporating some of these al. In a village setting, such causes community-based elements, with lo- might include an inequitable irrigation cal communities identifying those in scheme, health issues such as malaria need and targeting appropriate assis- or the need for a clinic or clean water, tance to them, is being implemented lack of access to or the quality of ed- successfully on a large scale in China ucation, local social divisions such as (“China’s New Approach”). Indeed, it caste or rivalries between families, or has been my observation that in many the corruption of local officials. In any cultures where there is widespread setting, Bahá’ís can just simply show poverty, anyone doing better than the more personal compassion and care rest is expected to give support to rel- for those in need, following the life- atives and friends, whether in the form long example of ‘Abdu’l-Bahá. of food at traditional feasts or direct A skeptic might say that relying financial support, as an important el- on people to feel more compassion for ement of community solidarity and others is just wishful Pollyanna think- social cohesion.14 ing. For example, in his recent book subject, see Van Parijs, Philippe and Yan- Creating Freedom (2016), Raoul Marti- nick Vanderborght, Basic Income: A Radical nez presents a fairly standard critique Proposal for a Free Society and a Sane Econ- of capitalism and the inequalities and omy. Harvard UP, 2017. 14 A Bahá’í PhD student at Cor- 15 See, for example, the passage quot- nell, Vesall Nourani, is researching this ed above that “there is an inherent moral phenomenon. dimension” to inequality. New Directions for Economics 53 waste it produces. His main prescrip- and among certain segments of the tion, at the end, is that people should population, such as young people be made to realize, when they spend (“Total Unemployment Rate”). In the on non-necessities, that they are ac- United States, at the time of this writ- tually wasting resources that could ing, although overall unemployment be used to save the lives of people in is low, wages are stagnant, many dis- desperate need. One criticism of the couraged workers have stopped seek- book is that his exhortation is unlike- ing employment but are not counted ly to have any practical effect. Having as unemployed, and there are serious posed a problem, he hasn’t offered a regional problems. realistic solution. But what he propos- Obviously, prolonged unemploy- es bears a striking resemblance to the ment can do permanent damage to Bahá’í law of Huqúqu’lláh mentioned one’s self-esteem and productivity above—the “profoundly private act of and make reentry into the workforce conscience that promotes the common increasingly difficult. Those of us good”—which Bahá’ís are obeying whose grandparents lived through the with enthusiasm and devotion (Uni- Great Depression of the 1930s heard versal House of Justice, Ridván . 1991 many stories of people whose lives Message). were crushed through a loss of their sense of self-worth when they became unemployed. In light of the emphasis EMPLOYMENT AND TRADE placed by Bahá’u’lláh on the impor- tance and value of each individual The inability to provide adequate em- making his or her contribution to soci- ployment to those willing to work is ety, Bahá’ís would give high priority to a major failing of modern capitalism finding solutions to this issue. and an issue underlying much of the Americans, especially, like to refer anger currently being expressed in to their “free enterprise system,” but politics. Unemployment, along with one never hears about a “free work- the corollaries of wage levels and job er system.” The current economic security, is a critical issue in the world, and political system of “free market” especially as it tends to be concentrat- countries encourages and supports ed in areas of economic decline and business, which in turn is expected among disadvantaged populations and to provide jobs, but only in that or- rises abruptly when there are econom- der, and with the jobs being a resid- ic or financial crises. In the euro area, ual and an indirect result after other for example, overall unemployment policies are implemented. Although in reached 12 percent in 2013 and was theory a group of unemployed work- still 10 percent in 2016, with much ers could hire a capitalist to employ higher rates in some countries (Greece them, this never happens in practice at 24 percent and Spain at 20 percent) (although there are other models such 54 The Journal of Bahá’í Studies 28.1-2 2018 as cooperatives and worker-owned with its consequences is called for. businesses that have a mixed record Although protectionism is not the but are worthy of study). While in answer, ways need to be found to im- principle anyone in America can start prove the resilience of industries that a business, and new, small business- are subject to competition, whether es are a very dynamic portion of the foreign or domestic, or to find alter- economy, to start a business one needs native employment for those who find both know-how and access to capital, themselves displaced. The concern which excludes a very large part of now is not only with manufacturing the total population. jobs, but also white-collar jobs that ap- The solution to unemployment is pear in danger from developments in not protectionism—the raising of artificial intelligence and other infor- barriers to trade to “protect” domes- mation processing technologies. How- tic industries and jobs. Protectionism ever, if we step back from thinking engenders retaliation by trading part- only in terms of the present economic ners and can lead to a trade war, dam- structure, we can see that the world aging all countries involved. It also is far from having run out of things effectively freezes the status quo, lead- that need to be done to improve our ing to complacency in protected in- lives and our environment. Whether dustries and killing the dynamism of caring better for the elderly and the an economy. On the other hand, free sick, beautifying our cities and our trade can increase inequality. While homes, enjoying more live music and there may be significant economic drama, reading more creative writing, gains from trade, the way those gains reversing the degradation of nature, are divided is subject to negotiation, improving and extending education, and the stronger partner is likely to or other vistas opening before human- capture the larger share. Also, while ity that we cannot now even imagine, proponents of free trade argue that there should be an infinite amount of the gains are big enough to compen- productive work for humanity. sate those who lose, it is challenging The problem, then, originates in to find appropriate ways to effect such the economic structure, in the difficul- compensation. Because many of the ty of finding ways to pay people for long-term unemployed are likely to be new types of work. It has been pro- poor as a result of their joblessness, posed that government programs be some of the practical considerations established that would provide work relating to addressing inequality also when the private sector fails to ade- apply to trade policy. Thus, while pro- quately fill this need, like the Works tectionism is a crude tool applied, and Progress Administration (WPA) pro- often misused, in a world of sovereign gram in the United States during the nation states, a fairer structure for reg- depression of the 1930s (Tanden et ulating international trade and dealing al.). But a more effective, or perhaps New Directions for Economics 55 complementary, approach could be to countries with weak institutions, gov- harness and encourage capacity at the ernment regulations and corruption local level for social compassion and go hand in hand, and dealing with support, as mentioned above, through officials is the greatest challenge an personal interaction with each in- entrepreneur faces. It can be very hard dividual leading to a knowledge of for a small business to survive when their needs and abilities, which likely competitors who pay bribes or use in- would include questions of education, side connections enjoy overwhelming training, and health care. The lack of advantages. Principled entrepreneurs such compassion can often be traced in such an environment may simply to prejudices of all kinds, including have to give up that line of work and class, race, and gender; to biases in move to something else that may be the education system and in hiring less remunerative but can help to bet- practices; and to a legal and economic ter align their working life and their system that favors and extols the rich values. and powerful. Perhaps a greater sense When someone is starting a new of compassion in communities and a business or is working in a very small breaking down of the barriers created business, it is important to think clear- by prejudice will motivate people at ly about objectives, priorities, and in- the local level, on their own initiative, centives. Fortunately, the current legal to find ways to employ the needy. In structure in most countries allows this way, the needy could contribute for many types of business entities, something valuable to the community, including corporations of different as opposed to simply receiving charity, sizes, family-owned businesses (the and community solidarity would be predominant business form in many enhanced. countries), cooperatives, and sole pro- prietorships, with a lot of flexibility in THE ORGANIZATION OF BUSINESS internal organization. And there is al- ENTITIES ready a great deal of experimentation specifically aiming to address the needs For businesses attempting to behave of all stakeholders, including workers, ethically, it is difficult to know how customers, and the broader society, as to balance social and moral objectives well as managers and investors, in the with the profit motive. At a personal field called social entrepreneurship, a level, an individual can try to choose a field in which Professor Ashraf is ac- profession that maximizes social wel- tive.16 But these experiments are still fare and minimizes conflict with his or her values. But in societies that are 16 One of her roles at the Lon- don School of Economics is serving riddled with corruption and perverse as research director of the Marshall incentives, it can be very hard to avoid Institute for Philanthropy and Social difficult moral choices. In the many Entrepreneurship. 56 The Journal of Bahá’í Studies 28.1-2 2018 limited, with social and environmental accord with the vision of the Univer- impact objectives being mostly a mat- sal House of Justice in its 1 March ter of public relations and spin rather 2017 message regarding innovation at than true aims of corporate policy. the working level. There is certainly The behavior of large and finan- plenty of scope for experimentation cially powerful enterprises is another in the way businesses are run, and central issue in many countries. The there is also a clear role for academic culture that primarily values profit researchers to study different models and outsmarting competitors can lead using rigorous methods as part of the organizations into behavior that is ex- learning process. tremely damaging to society and even illegal. Witness the recent scandals THE ORGANIZATION OF PUBLIC over emissions produced by Volkswa- SERVICE AND THE SIZE OF THE PUBLIC gen automobiles. The general culture SECTOR is likewise greatly affected by the re- sultant emphasis on overconsumption, Governments are a very large part outward appearances, and a superfi- of modern economies. There is a cial, materialistic view of life. Individ- never-ending political battle over ual workers or managers in such en- the proper size and scope of govern- terprises have to deal with an internal ment and the taxes that support it. culture as well as an external environ- The private sector is subject to many ment that might not accord with their shortcomings, prompting the need for values. Even the most well-meaning regulation, but the public sector suf- people are affected by the culture and fers from its own afflictions, primarily incentive structure in which they find those of perverse incentives. So one themselves and can face difficult moral aspect of the policy challenge is how challenges. to make public service entities work So the question is, how do we better. change this type of business behavior? In a bureaucracy, to protect and A Bahá’í-inspired organization called expand one’s domain it is usually nec- ebbf (ethical business building the fu- essary to spend all of one’s budgeted ture) has been serving for twenty-sev- resources and find justifications for an en years as a forum and organizer of increase in the next budget cycle. If conferences for businesspeople and one’s budget is under threat, a com- anyone interested in ethical business mon tactic is to cut or threaten to cut practices, helping to meet a need for the most visible and important activi- the exchange of ideas, best practic- ty. A true effort to eliminate waste and es, and moral support.17 It seems to improve efficiency is rarely rewarded. Innovation is almost absent. Armies, 17 For more information, visit their schools, police and fire departments, website at http://ebbf.org/. and so forth operate now more or less New Directions for Economics 57 as they did a century ago. How, then, and dense, with so many cross refer- do we create incentives within large ences, sometimes circular, that it can bureaucracies to improve performance be difficult to discern the intent even while minimizing costs? How do we after careful study. Although it is an introduce a more consultative and attempt to produce a just system based service-oriented culture? How can on clear rules, it ends up becoming an organizations, and indeed whole soci- enormously expensive, time-consum- eties, bring about moral and altruistic ing disaster. And that is just the US behavior? federal government. There are also In Western countries it is wide- state and local codes. For example, the ly believed that the rule of law, with California code covering general edu- appropriate institutions (police and cation (public schools) has more than courts), are a chief source of motiva- 8,800 articles, some of which are quite tion for citizens to behave well. It is lengthy and contain numerous subsec- also recognized that a “capitalist” sys- tions. The situation is so extreme that tem based on the incentives of profit is has become absurd. and personal enrichment produces Perhaps the solution to this central many “negative externalities” (neg- dilemma of economic policy—how to ative effects on others and society), achieve economic justice through fair and that such tendencies need to be and enforceable rules—is to look at curbed through laws and regulations the problem from a different perspec- imposed by the government. In reality, tive. As mentioned above, instead of however, laws and regulations and the assuming that individuals are mainly institutions that enforce them can only motivated by self-interest and greed affect marginal behavior, i.e., the most that needs to be constrained, greater extreme cases of deviation, while the reliance needs to be placed on the mor- behavior of the general population al development of the individual and is guided more by unwritten cultural the moral standards of society. It is norms. Furthermore, people are clev- here that Bahá’ís and those who sym- er in finding ways around laws and pathize with Bahá’í principles must in- regulations. A modern economy is creasingly demonstrate the power of complex and changing, and the chal- individual commitment to moral be- lenges of responding to problems havior, while eschewing the religiosity, as they arise through new laws and closed-mindedness, and sense of supe- regulations means they proliferate, riority that many people find so objec- eventually strangling economic activ- tionable in the attitudes of organized ity and innovation. The US domestic religions. In organizations as well as in tax code (Title 26), for example, con- society as a whole, this approach may tains 100 chapters and almost 10,000 entail having fewer meaningless rules sections, each having up to four layers and regulations and relying more on a of subsections. It is so poorly written common sense of what is decent and 58 The Journal of Bahá’í Studies 28.1-2 2018 moral behavior. How such an approach argue that the contribution of the can be implemented in practice, how- financial sector to the welfare and ever, is probably a question of learning productivity of the US economy actu- from experimentation, much the same ally warrants over one-quarter of all process as innovation in businesses. domestic corporate profits. It is quite clear that the sector is still capturing THE FINANCIAL SYSTEM extraordinary benefits because of its position of power and access to infor- The financial crisis of 2007–08 mation, often by blatant exploitation demonstrated that problems with the and even corruption (Kotlikoff 1–122). financial system can be extremely As a result of the crisis, some econo- costly and damaging. The average em- mists and former bankers have spoken ployment rate of developed countries out about the need for a fundamental only recovered to the pre-crisis level rethinking of the structure of modern nine years later (OECD, OECD Em- banking and finance, among them for- ployment 22), prompting political back- mer governor of the Bank of England lash and efforts to make the financial Mervyn King.18 Perhaps most inter- system more stable through increased estingly, a proposal known as the Chi- regulation and higher capital require- cago Plan, first made in the 1930s and ments. However, heaping more regu- supported by the famous Yale econo- lations on an already highly regulated mist Irving Fisher, has been revived. sector brings costs with it, and highly Rather than allowing banks to create paid, highly incentivized bankers and money whenever they make a loan, their lawyers continue to find ways to subject only to general restrictions on avoid or exploit regulations and max- their level of capital and reserves, the imize their profits. In this regard, it plan proposes that only the govern- is instructive to look at the outsized ment be allowed to create money and proportion of total corporate profits that banks be restricted to managing in America earned by financial sector it. This idea, which comes in differ- companies. In the 1970s and 1980s ent flavors and is now often referred they earned on average 17 percent of to as “narrow banking,” “full-reserve all domestic corporate profits. The fig- banking,” “100% reserve banking,” or ure jumped by 10 percentage points in “limited purpose banking” has been 2001 and reached over 37 percent in supported and elaborated recently by 2002. Even after the financial crisis of a number of respected economists19 2007–08 and the scaling back of some of the speculative and exploitative ac- 18 See King’s book The End of Alchemy. tivity in the sector, the industry still 19 See, for example, John Kay’s arti- captured 27 percent of all corporate cle “Should We Have ‘Narrow Banking’?” profits in 2016 (US Bureau of Eco- and his book Other People’s Money; Lau- nomic Analysis). Few could seriously rence Kotlikoff ’s Jimmy Stewart Is Dead; New Directions for Economics 59 and other writers (Jackson and Dyson) the classic example in economics of and in an IMF working paper (Benes negative externalities. The usual pre- and Kumhof). One virtue of such a scription is government regulation, system is that it would eliminate the although, as noted above, the actual largest source of instability in the implementation of regulations can be current financial system by reducing highly problematic, and in this arena or eliminating financial risk-taking by there are large and continuing polit- government-backed financial institu- ical battles. But pollution, or simply tions (which leads to “moral hazard” trash or lack of maintenance, can or excessive risk-taking) and forcing be an important local issue as well, investors to accept such risk directly. amenable to local solutions. Progress The fact that Bahá’u’lláh has permit- in reversing environmental degrada- ted the charging of interest does not tion may also depend in large part necessarily imply that the government on education, increasing the public’s should assume a major part of the risk awareness of the nature of the prob- in the banking system, as is currently lem. In this context, it is notewor- the case. Because the ups and downs thy that Bahá’í junior youth groups in finance generally benefit “insiders” in different parts of the world often who can make fortunes at the expense choose, on their own initiative, a local of the general public, greater financial cleanup, park beautification, or gar- stability would also reduce the inequi- dening project as a first service proj- ties in the present system and would ect. The benefits can often far exceed likely encourage capital to flow into the stated goal of the project itself more productive and less speculative or the education of the youth, as the investments. This is a topic that could community sees the interest of the benefit from further study. young people in improving their sur- roundings and begins to question its NATURAL RESOURCES AND own indifference and inaction. When PROTECTING THE ENVIRONMENT a junior youth gardening project in a blighted neighborhood of Baltimore Protecting the natural environment was mowed over by a city worker, and enhancing the manmade envi- the youth involved turned to social ronment are natural priorities for media to publicize the incident and a community that emphasizes the soon the local television station was common good. Environmental pol- on location filming, resulting in the lution, often caused by actions that deputy mayor helping to replant the might benefit one individual or com- garden amid more publicity for this pany but negatively affect society, is public-spirited initiative by the youth (Sobhani). In this process, the youth and Adair Turner’s Between Debt and the also develop an important capacity for Devil. positive social action. 60 The Journal of Bahá’í Studies 28.1-2 2018 Of course, although drawing the When moral consensus in society attention of youth to environmental breaks down, corruption flourishes. problems and encouraging them to Corruption requires access to power. take action, however modest, is an im- The corrupt are therefore in a position portant educational step and may have to protect themselves very effectively broader impacts, social structures that and can only be constrained when a lead to the despoiling of the environ- broad social movement arises in oppo- ment are often linked to the exploita- sition, such as the non-violent move- tion of populations, not just of natural ment spearheaded by Gandhi in India resources, and thus are related to the and the many color movements that issues of prejudice, class divisions, and started with Solidarity in Poland. inequality discussed above. Thus, although studying tech- niques for curbing corruption is use- CORRUPTION ful, the broad political will to actually stop corruption will only arise when Corruption, broadly defined to in- populations can rally around a moral clude privilege, injustice, exploitation, consensus, a “shared ethic” (UHJ, Mes- and organized crime, is arguably the sage to the Bahá’ís of the World dat- most important economic and politi- ed 1 March 2017). For Bahá’ís, then, cal problem of our time. In Western the priority is to work on awakening countries, public trust in institutions and developing the moral conscious- of all kinds regularly hits new lows. ness of the population, and this effort For example, in recent Gallup polls is most effective when starting with only 8 percent of Americans rate children and youth. Individuals can congressmen as highly ethical, below also lead by example. As the standards 9 percent for car salesmen (“Hones- in public service decline, the need for ty/Ethics”). And President Barack people who establish a reputation for Obama, in his first State of the Union competence, integrity, and dedication address, declared: “We face a deficit of to service increases, and their example trust.” Economists can argue about can help raise the expectations of the the relative merits of different eco- public regarding the qualities required nomic systems such as capitalism and for such service. As always, actions socialism, but the reality, as we can see speak louder than words. plainly in the world, is that any system The impact of dishonesty and can be more or less corrupted, and the selfishness on economic prosperity is degree to which it is—more than any particularly pernicious, as can be seen other variable—explains success mea- in the growing reaction against cor- sured in terms of the general welfare ruption worldwide. Whether or not of the population. Corruption has thus corruption is actually getting worse, moved to the center stage in much of however, is an interesting question, the political struggle of our time. given that human beings have been New Directions for Economics 61 exploiting their fellow man at least to publish, but it also likely reflects as long as recorded history. It may be financial and other incentives to pro- that it has merely become more visible duce the results desired by interested and harder to hide as technology has parties, as well as the general decline greatly enhanced the general public’s in moral standards in society. Such an access to information and increased erosion of ethics strikes at the heart the ease of and incentives for leaks of a process of discovery of the truth of confidential information. The re- that has been central to the leap in hu- action to corruption may also reflect man welfare in modern history. a declining public tolerance for such An extreme, but instructive, exam- behavior and a stricter enforcement of ple of the forces at work is the case laws against criminal behavior, mon- of David Kelly, a Bahá’í scientist and ey laundering, theft, embezzlement, authority on biological warfare who blackmail, illegal resource exploita- was asked by the British government tion, etc., with the resultant height- to investigate the existence of weap- ened publicity of such wrongdoing, ons of mass destruction in Iraq in giving an appearance of an increase 2003, when this was a high-profile in the underlying activity. In any case, political issue. He reported honestly it is encouraging that the public is be- that he found none, but his findings coming more aware and less tolerant were in direct contradiction to a public of corruption, raising hope that this statement on the subject by the Brit- central problem of modern gover- ish prime minister and were ignored, nance will be increasingly addressed. although later proven correct (“Dr David Kelly”; Gilligan). Other exam- INTEGRITY IN SCIENCE AND PUBLIC ples of the overwhelming influence of DISCOURSE vested interests, from industry and the field of nutrition and public health, are Corruption in the broad sense is also recounted by Dr. T. Colin Campbell (in eroding the foundations of public dis- part 4 of The China Study) and Gary course and scientific endeavor. Scien- Taubes (in The Case Against Sugar). tific method involves the publication More recently, concern is rising of experimental results so that they that public discourse is being corrupt- can either be confirmed or rejected ed by political propaganda, including by the scientific community. Unfortu- “fake news” and “alternative facts,” nately, the number of scientific papers and undermined by a tendency in the published in the leading journals that Internet age for people to listen only cannot ultimately be confirmed by to opinions and news that they want other scientists is creating “growing to hear. alarm” (“Challenges”; Baker; Nosek In economics, there has already been et al.). Presumably, this trend part- a welcome move to publish the datasets ly reflects the pressure on scientists underlying studies and publications, 62 The Journal of Bahá’í Studies 28.1-2 2018 leading to useful debates—for exam- than those favored at present, even ple, debates about Piketty’s method- assuming that social structures can be ology and whether his conclusions transformed over time by the positive are justified. However, we should not influence of a new religious revelation underestimate the difficulties that an and by the destructive breakdown in economist may face if he or she chal- the present order that, in the words of lenges the accepted wisdom of the the Shoghi Effendi, “welds the limbs of field or of public policy or threatens humanity into one single organism, in- vested interests. Those approaching divisible, purified, God-conscious and economics from a Bahá’í perspective divinely directed” (Messages 45). It is will need to rise to the challenge of also challenging to visualize how no- trying to harmonize their work with ble spiritual principles can be applied high principles of integrity, honesty, through the actions of individuals and and an unbiased perspective. communities in the context of today’s fractured, disoriented societies. But the CONCLUSION Universal House of Justice is now call- ing upon Bahá’ís to increasingly face The principle of the unity of man- this challenge of making their actions kind has far-reaching implications. It coherent with their principles. This ar- encompasses the need to break down ticle has been a reflection on what form the barriers between groups of people, such efforts might take and on the pos- including between intellectuals and the sible relationship between the academ- general public, and to involve everyone ic field of economics and the actions in the process of knowledge creation of individuals and communities within and social and economic development, the circumstances in which they find empowering people to become the pro- themselves. tagonists in their own development When examining some of the ar- within a social context characterized eas of current debate and concern by reciprocity and mutual support. A about the functioning of the economic view of God’s creation as one whole systems of the world, it becomes ap- also implies the breaking down of parent that the Bahá’í teachings have barriers between fields of study. It im- a great deal to contribute on these plies viewing human society as a single subjects, opening up the potential system, one which we choose to view for useful contributions both by pro- and study from different perspectives, fessional economists inspired by the while becoming increasingly aware of Bahá’í teachings and by individuals the interrelationships within the whole. and communities generating knowl- It presents enormous intellectual chal- edge about how spiritual principles can lenges but also great opportunities. be applied to economic life. Indeed, one It can be difficult to conceive of a so- could conclude that from the point of ciety based on very different principles view of the Bahá’í teachings, much of New Directions for Economics 63 the present field of economics needs life situations, with integrity and a to be rethought. 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