On Foreign Economic Laws of Economy Development and Keynotes of Economic Education
ONFOREIGNECONOMICLAWSOFECONOMYDEVELOPMENTANDKEYNOTES OF ECONOMIC EDUCATION
V.V.Kompaniets, Doctor of Economics, Professor,
Ukrainian State University of Railway Transport, Kharkov, Ukraine
“You ask about the reason of the current crisis or judgement of God? Thereisalwaystheonlyreason. The reason of all droughts, floods, epidemics and other perils is the same as the reason of the current crisis – it is apostasy. Thesinofapostasyhasbroughtaboutthiscrisisaswell, andGod has allowed it to awaken and sober people to make them come to senses and get back to Him”.
St. NicholasSerbian [1, p.15]
Thecurrentgrowingsocialandeconomiccrisisisonlythetipofasystem-widecrisishavingaffectedallspheresofsociety’sactivities. Thebasisofasystemiccrisisisformedbymoralandspiritualcrisis, bythecrisisofhuman person, and, for Russia and Ukraine, this crisis has come out from the erroneous choice of a civilizational way of development. And our education, including the economic education, follows this misguided path as well.
Today, education, whichislosingthemoralandspiritual, cultural and social basis, participates in creation of a nosogenic crisis and converts to a tool of destruction of the Orthodox civilization. Itisclearlyseenthroughtheexampleofeconomiceducation, whichactivelyintroducesthevaluesalientotheOrthodoxcivilizationandproposesamodeloftheso-calledmarket-driven economy as being the only correct one (it can be called capitalism or chrematistics in other words), and the main goal of this model, if not covered by nice definitions, is getting rich and obtaining powers by the select few.And, ofcourse, thedegradationofeducationisabsolutely necessary to implement this goal. Indeed, ifyouerectabuildingofeducationonthemoralandspiritual, culturalandsocialgrounds, beingfocusedontheall-round (spirit, soulandbody) development of personality, development of soul (mind, will, senses) by encouraging the revelation of the image of God in a person, then it will be impossible to produce the most valuable resource of the market-driven economy – an unthinking person deprived of moral compass.
Economyisaworldlyandfinitephenomenon, but paradoxically as it may seem, it influences the destiny of man in the eternity. Thesamecanbesaidaboutthecontentofeconomictheoryand economic education on the whole. Infact, thetypeofeconomicbehavior, managementandactivitiesintheeconomicsphereingeneral, whichistobeselectedbyastudenttodayand will be selectedbyfuturespecialists, managersandentrepreneurstomorrow, dependsontheunderstandingofthe essence and objectives of economy and laws determining its development, types of social and economic systems and management models, on the understanding of the sense of and correct attitude to work, wealth, cooperation, competition, that is, of all the things communicated via economic education (and secured by experience and example of activities in the current economic sphere).
The national ideology has been long absent in our society, and it has been “successfully” substituted by economic “science”, in a point of fact transformed to the monetary ideology. Economy, andtobemorecorrect – chrematistics, as well as both ideology and human relations, has resolved into an anti-Gospel.Itevangelizes, andalsofromthelipsofprofessorsandscientists, andalsothroughthebehaviorofthose in power, business elite and the majority of entrepreneurs, that “everyone and everything is driven by profit” and that “money is the source of all goodness”.Unfortunately, ourscientists, teachersandstudents, entrepreneursandmanagers, forthemostpart, donotknowatallabouttheidealsoftheOrthodoxeconomicmanagementmodelhistoricallyinherentinus– abouttheattitudetoworkasavirtue; attitudetoproperty, wealthandpowerasan ordeal and responsibility; about the moral law also governing the social and economic development; about foreign economic (social, humane, environmental, moral, soteriological) objectives of economy. Theyalsodonotknowthattheseidealshavebeenimplementedin real practices for centuries and have demonstrated the examples of highly efficient economic management.
Themonetaryideologyhad effect and hascausedchangesinconsciousness of society and, especially, young people. Thevaluepyramidofsociety, thatofyoungpeopleincluding, is upside down as compared to its ideal formed in the Orthodox culture.NowthemainvaluesdonotincludeGod, Motherland, familyandcreative labor, but rather include accumulation, wealth and consumption, obtaining maximum of pleasures. Butdistortedconsciousness, asitisknown, generatesadeformed behavior. Hence, theerosionoffamilies, societyandeconomysinkinginunprecedented corruption.
Tochangethesituation, weneedtobuild-upeconomiceducationonmoralandspiritual, socialandculturalcoordinates.
Weshouldseparatelydwellonthelaws determining the development of economy, and in a wider sense – of all social systems. Thefollowing “economiclaws” areusuallygiventostudents: lawofrequirementsincrease; lawofdemand; lawofsupply; lawofdemand and supply interdependence; law of diminishing returns; law of economy of scale; law of time saving; law of competition, etc.Infact, alltheabovearenotthelaws, theseareonlysomedependencesandregularities manifesting themselves not all the time and not in all social and economic systems.
There are two types of laws determining the development of a social system. Thefirstlawreflectsthedecisiveinfluenceofmoralandspiritualfactorsonthe entire scope of social development (in a wider sense – the development of both society and nature), including the progress of historical process and also the development of economy. Letuscallitthelawofmoralandspiritualdeterminationofsocial as well as economic development.Thislawisfullyrecognizedin the Orthodox theology, it was first substantiated by the theologian of the 20th century– Saint Nicholas Serbian [2].Asrelatedtoeconomy, itcanbestatedasfollows: thedevelopmentofsocialandeconomicsystemfundamentally depends on the moral and spiritual factors (moral and spiritual capital of people).
Theotherlawreflectstheinfluenceofthetypeofreligion (belief) and, consequently, of the type of culture on peculiarities, condition and development of a social system, its economic component including. Letuscallthislawthe law of social and cultural (civilizational) identity. Itwasfirstlaiddownin the 19th century asalawofuntransferability by the Russian scientist and social activist N.Ia.Danilevsky. As related to economy, it can be formulated as follows: the successfulness of economic development of one or another civilization and a country belonging to it depends on the compliance of a social and economic model of development with the culture of this civilization.Today, the impact of this law onto the development of society (local civilizations), economic development including, is recognized by many scientists.
Thenecessityofmoraland spiritual development of society being in advance of its material development and also the creation of conditions inside a system promoting the above is the consequence of the first law.Itpresupposesthe subordination of economic development to moral and spiritual principles, the necessity of designing of the corresponding strategy and policy of the state.
Thenecessityofcomplianceofcontroloverallcomponentsofasocialsystemwiththeprinciplesandrulesofcultureitwasformedinisthe consequence of the second law. Intheeconomicsphere,itwillmeanthenecessityofdesigningofastrategyanda policycomplyingwiththe cultural foundation of this or that civilization, which, of course, does not exclude the use of technical and technological achievements and experience of other civilizations.
Since the law of moral and spiritual determination of social development is the least explored sphere, let us dwell on it in detail.
What is the essence of the moral and spiritual law?Themoralandspirituallawapplies to everyone. Thislawinvolveslivinghonestly and respecting commandments, the two highest commandments of which are love for God and love for neighbors. The fulfillment or violation of these rules has an impact on the destiny of a person and humanity in general. Itmeansboththeworldlyconsequencesofjustandunjustlifeandthe fate of a person in eternity.
Asfarastheeconomicproblemsareconcerned, the dependence between moral and spiritual condition of society and the level of economic development is hard to trace. Itisexplainedbythefollowingcircumstances.
Theevidencewillbefully acceptedonlywhenresearchersareinthesame “systemofcoordinates”, i.e. accept the same ontology and paradigm of social development, economy including (linear paradigm – abnegating or non-linear paradigm – recognizing the unique nature of difference social and cultural systems and civilizations).
Itshouldbeunderstoodthatthemoralandspiritualsocialandculturalsystem, includingtheOrthodoxcivilizationhistoricallyinherentinus, unlikethe sensual and immoral system, recognizes the existence of two dimensions of social and economic development: horizontal and vertical.Theverticaldimensionisconnectedwiththerecognitionofthetruthofspiritualworldexistence and effectiveness of its laws, which cannot be understood from the position of the horizontal – worldly – dimension.
Thus, therenownedscientistandthinkeroftoday – A.S.Panarin – reasoning about the crisis of progress theory writes about two types of ontology. Henotes: “Ontheonehand, wehavetheontologyofeconomic, technicalandpoliticalworld, wherethelawsofgradualism, timehierarchyof early and late, more and less developed have effect, and on the other hand – the ontology of moral and spiritual world being unaware of such hierarchies and the corresponding correlation between the technical and economic maturity and spiritual perfection. Inspiritualsphere, thelatterarequitefrequentlythefirstifjudgedbyprogressparameters, thehumbleonesgetaheadofdynamicandself-assured ones” [3, p.188].
Ifbasedupontheontologyofmoralandspiritual (ideational) socialandculturalsystem and theologicalworldview, then gaining of insight into the regularities of social and economic development of society must presuppose a reasonable synthesis of such components astheological knowledge, “knowledge”, experience of belief; metaphysical thinking and positive knowledge. Andthefirst “knowledge” isthebasis.
Humanmindcannotalwaysgrasp the effect of moral and spiritual law.Humanperceptionandunderstandingofcertaintruthsdependsonbothculturalsystemheorshewasbroughtupandeducatedin, andhisorher personal moral and spiritual condition, “ego” power, and influence of spiritual world.
Itisdifficulttoadmittheeffectofsuchlaw, asaresultofempiricalobservations, inasystemwherethemoralrelativismreigns, and this is exactly the system, where the most part of humanity lives, including the Russian and Ukrainian society.
Thefollowingfactorscomplicatethesearchfordependencebetweenmoralandspirituallevelandlevelofeconomicdevelopment: necessityofresearchingoverlongtimeintervals; complexityandsometimesimpossibilityofcollectionofreliableinformation, inconsistencyofdata; relativityofestimationcriteriaanderrorsintheirselection; impossibilitytoevaluatelotsofphenomenainmoralandspiritualsphere.
Theimpactofa timelagis also of great importance. The violation of moral law in social life and economic activity may have impact on an economic entity in some time and has an impact on economy in whole also when some time passes. Thesamecanbesaidaboutthereverseeffect: suppose that suddenly all economic entities start to observe moral rules within the scope of their activities after a long period of violations, then it will take some time for the positive effect to manifest: a certain period of time is necessary for the recovery of social and economic sphere and elimination of consequences of the previous violations.
Therearealsonumerousconstraintsforhumanconsciousness– impossibility of long-term observations of one and the same entity or system having violated the moral law. Thefieldofvisionisalsoverylimited, forexample, innersorrowsofaperson, hisorherillnesses, fate of his or her relatives can be hidden from us, and, finally, we do not know inner positive changes in a person, his or her repentance.
Apparently, allthesecomplexitiesofresearchpresupposegiving the benefit of doubt to the effect of moral and spiritual law, although, certain evidences do exist.
Veryinteresting, trueandsufficientlyconvincingevidences of the effect of moral and spiritual law in society and economy as well are given by the renowned Serbian theologian, social activist and scientist (Doctor of Philosophy and Theology) – Saint Nicholas Serbian (1881-1956).
Whileresearchingthe Sacred History of the Old Testament, hestatesandproves that the moral and spiritual law determines the effect of the so-called natural laws, the march of history, the destinies of peoples, and the effect of social laws. Heusesthemethodofhistoricalresearch, the results of different scientific theories confirming the truth of moral and spiritual law as the evidence. Heshowsthatlotsofhistoricaleventscannotbeexplainedbyscienceuptillnow, astheyareoutside the effect of the established natural laws. Theycanbeexplainedonlyfrom the perspective of theological approach, recognition of truth of the Old Testament events and their biblical interpretation. Inparticular, itisscientificallynon-cognizable, but theologically explainable mystery of human languages – formation of different languages of different peoples.How can it be explained scientifically that “peoples differ in language more than they differ in appearance and color or skin, feelings and perception. Howcanthatstrikingdissimilaritiesoccur, ifallpeopleoriginatedfromoneancestor as it is now affirmed by all scientists”, - St. Nicholas Serbian writes [2, p.31]. ThisisthereasonoftheFloodrecognized, butnotexplainedbyscientists, andwell-explainable by the violation of moral law by the first humanity. AndsciencecannotexplainthedisappearanceoftheCanaanitesas well. This fact can be explained only by the effect of moral law. Noahcursed the descendants of Ham – his grandson Canaan – because of Ham’s immoral behavior, and under the burden of this curse all their descendants fell and disappeared [2, p.31].
Thedisappearanceofcitiesandentirecivilizationsis also associated with the violation of moral law. Forexample, Tyre – arichandluxuriouscity – diednot due to economic causes.Numerousiniquities, unjusttrade, unjustwealthandluxury, abandoning of God, those were the reasons of disappearance of the city mentioned by prophet Ezekiel [2, p.57]. Wicked lust is the reason of destruction of Sodom and Gomorrah. Sulphur and fire storm poured onto Sodom and wiped it off, and this phenomenon itself cannot be explained by any laws of nature. AncientEgyptandBabylonianEmpire, which were considered to be well-developed civilizations (which is evidenced by today’s excavations), disappeared. Andtheirdisappearancecanbeexplainedonlybymorallaw (worshiping of idols, over-subtleness of people, and immense wealth killed the people).
SaintNicholasSerbianalsoshows, basedonstudyingofsacredbooksandbeliefsofdifferentpeoples (ancientGreeks, Muslims, peopleoftheOrient), thatallofthemrecognizedthe superiority of the moral law and its effect on nature, destinies of peoples and every person, health of people and giving birth to children.
Asrelatedtothesocialandeconomicsphere, SaintNicholasSerbianexplainstheeffectofmoralandspirituallawasfollows.
WhileconsideringthetheoryofK.Marx, henotesthattheissueofconflictbetweenlaborandcapitalisabsolutely misleading – “as an issue of interrelation of impersonal capital and impersonal labor opposed to each other as two speechless enemies”. The antagonism between capital, on the one hand, and work force, on the other hand, was caused by the disregard of moral power in person-to-person relations. “Inapointoffact, thecapitalandlaborrelations is the issue of person-to-person relations, and any issue of person-to-person relations has the moral nature and, as such, must be subject to the moral law and be governed by only it” [2, p.66].
Answeringtoquestion: “whatdoeseconomicpositionofanycountrydependon?” – SaintNicholasSerbianspecifiesthreefactors: “onrain, onhealth, andonagreementandunanimityofpeople” [2, p.67]. Infact, thesearenaturalandclimaticconditions, demographiccharacteristicsofpopulationandmoralandpsychologicalqualitiesofpeople, whomtheconcurrenceofactionsdependson. Hecontinues: “Ifcropsareruinedbydrought, peoplearekilledbyepidemics, andcattle – byplague, and if on top of all that there is no peace and conciliation among people, then what are the piles of management theories needed for? Thenwhatfor doweneedallthese economicmanagementlawsandregulations governing economic activities? ButrainandhealtharegivenbyGodasconsistentwithfaith, devotion, obedienceandcharity of the people” [2, p.67].
Thefactthatahumanispracticallyunabletopositivelyinfluencethenaturalandclimaticconditions, andthe other way round, unfortunately, frequently becomes the cause of natural calamities is commonly known today. Themajorityofcontemporaryscientistsadmitthatthe current changes in climate, heavy rains, floods and droughts are the results of human activities. Exactlythesereasonsraiseseriousconcernsrelatingtotheglobalfood crisis and have impact on economic stability of many prosperous countries.
Thenextfactorispeaceandagreementbetweenpeople.Thefactthatthequalityoflegalinstruments, politicalandeconomicstabilityin the state dependonpeaceandagreementbetweenpeople is evident as illustrated by the example of Russia and Ukraine.
Thecausesofdeteriorationofhumanhealth, highmortalityandlowbirthrateatthe post-Soviet territory during the period of “market reforming” have constituted the scope of a comprehensive research by the contemporary Russian scientist, member of the Russian Academy of Sciences, I.A.Gundarov [4]. Basedonquantitativemethodsofassessmentofdemographiccrisiscauses, andalsoonstudyingofmoralandspiritualteachingof human life rules existing inthemainworldreligions, he came to a conclusion that the demographic crisis was caused, in the first place, by the effect of moral and spiritual factors. Havingconductedacomprehensiveresearchwithmathematicalmodellingapplied, heascertainedthatthe growth of mortality of Russian population for the period of reforms in 90s of the 20th century was only 16% connected with the impact of social and economic factors, and the remaining 84% referred to the impact of moral and spiritual factors (growth in aggressiveness, hopelessness, i.e. spiritual illnesses of people) [5].The same can be said about the birth rate. Itsreductionis, firstandforemost, theconsequenceoferratic and immoral way of living at leisure, unwillingness to take additional care of others, establishing of possibility and moral impunity of abortions, deterioration of health of future parents, distrust to the moral principle that when giving life to a child the Creator also gives opportunities to provide a child with all the things needed.
Theresearchconductedbyotherscientistsalsoshowsthat, incountrieshavingpreservedthetraditionalreligiousmodelandvalues, the birth rate is significantly higher than in the Western civilization countries with the high level of material welfare, but with the changed value orientation, where personal income, pleasures and carrier occupy the first place, and only then goes a child requiring the self-sacrifice of parents.
V.I.Iakunin, V.E.BagdasarianandS.S.Sulakshinconsider the ideological and spiritual resource as one of the most important factors of economic development.Theyimplybothspiritualmotivationofworkandeconomicactivities and ideological motivation based on believing in power of the party, the people and the state. Ofcourse, suchcombinationmaypromotetheassessmentofimpactofnon-economicfactorsoneconomy, butitequatesthespiritualityandideology, which, in fact, is incorrect, since ideology can be of both humane and anti-humane nature and can be grounded on both religious and atheistic worldview. Nevertheless, takingintoaccountthe formative rather than society-destructive ideology and by studying the economic development of Russia in the 20th century in connection with the spiritual and ideological factor, they come to very important conclusions.
Usingthepaircorrelationmethod, theycalculatedthelevelofcause-and-effectrelationshipofthegrowthofgrossindustrialproductionwiththemateriallevel (accumulatedgoodsdeterminingthe qualityof life ofaperson), theideologicalandspiritualmaturityandalsowith thevalueofworkinpublicconsciousness. Forthepurposesofcalculationpurity, theytookatimeintervalinthesecondhalfofthe 20thcentury (1946–2000) excluding the force majeure circumstances of the large-scale wars happened during the first half of the century (1904–1905, 1914–1920, 1941–1945), as well as the revolutions, when the third – external – factor was influencing the indicators of economic development [6, p.29]. Theresultsobtainedareabsolutelyfrustratingfromthepointofviewofneoliberal theory. The coefficient of correlation of the ideological and spiritual maturity of society and the growth of gross industrial production amounted to +0.59. The dependence of the factor of work value in public consciousness turned out to be even more weighty (the correlation coefficient equaled +0.69). Thedataobtainedevidencesthesignificance of motivation of spiritual and ideological content for economy. Andthe total material factor and the growth of gross industrial product in Russia, as based on the analysis results, are in anti-correlation to each other (with the value of –0.7).Thus, alinkwell-knownatthelevelofeverydayfolkideashaseffect, andaccordingtoit, thehigherthe material wealth of a person is, the worse the person works. ThemateriallymotivatedRussiansocietyhasanegativepotentialas related to economic development. Maybe, it is a unique feature of the Russian national mentality? Butthetrendofreductionofgrossdomesticproductgrowthrateshappening with the secularization of consciousness of a Western person noticed by scientists intheWest allows to assume that this phenomenon has a universal nature.To give the final answer, a similar research needs to be carried out in Western countries [6, p.30-32].
As we know, the development of modern economy is impossible without new technologies. And the positive role here is also plaid by the moral factor. Forexample, ateamofRussianscientistsheadedbyProfessorA.V.Iurievich, carried out a research, which resulted into the establishment of a close connection of moral condition of the Russian society with the indicators of innovative activities. Namely, thecorrelationbetweenthemoralconditionofsocietyandthenumberofadvancedtechnologiesusedamountedto–0.938, share of innovative product in total production volume – 0.888, number of advanced technologies created per 1 mln citizens – 0.574, number of patents per 1 mln citizens – 0.539 [7].
TherenownedsociologistP.Sorokintriedtotracetherelationbetweenthedominating type of cultural mentality (sensual, idealistic, ideational) and economic conditions in the system [8]. Accordingtohim, suchrelationundoubtedlyexists, butitisnota direct one. Therearecertainobstaclespreventingthedetectionofthedirectrelationbetweentheprevailingtypeofculturalmentalityandthelevelofeconomicdevelopmentandthe coincidence of changes in culture and economic system: contradictions inside a social system; influence of different external and random factors; immanent consequences of development of culture itself.Letusdwellonthelastpoint: intheeventofhighorevenexcessivedevelopmentofsensualorideationalculture, causesleadingtothe decay of culture and to the corresponding changes in economic conditions occur in the system.
Thesensualculturewithitsmaterialidealsischaracterizedbystrivingofsocietyforattainment, wealth, pleasures, bythedominanceofeconomicegoismandhighratesofeconomicdevelopmentinthebeginning.Intime,thesedesiresbringaboutthesituationwhenonestartstoforgetthemoralrules, peoplelosethe sense of moderation and safety, which originates a high degree of social differentiation, then conflicts and wars sharply diminishing the level of economic well-being. That is how it is described by P.Sorokin, and he is supported by S.N.Bulgakov.
Inhispaper, “MainProblemsofProgressTheory”, S.N.Bulgakovnotesthattheeudemonicalideal of progress, which dominates in the Western society and economic theory, when happiness equals pleasures gained from the growth of requirements and possibility of their satisfaction, is selfish. Itbringsaboutthegrowthofsensualpleasures, consumerism and destruction of the world [9, p.616]. Andinhispaper “About Economic Ideal”, he stresses the relation between moral and spiritual condition of society and development of economy and notes that, when society is focused on material values, it leads to spiritual decline, which is followed by economic decline [10, p.656-657].
But what can be said about the development of economy in an ideational social and cultural system? In such a system, the keynote of society development is formed by moral and spiritual values. However, itdoesnothinderthedevelopmentofeconomy. The difference is that it develops according to different laws, principles and mechanisms, at rates and proportions differing from economy of a sensual society. P.Sorokindescribesthispeculiarityasfollows: “Inspiteofnegativeattitudetowealthandmaterialwell-being, ideationalismgivesrisetodriving forces, which frequently promote the improvement of economic position of not only ideational culture bearers, but of a much wider community” [8, p.607].