The Link between Morality and Economics: The Case of Ghana

We will never get anywhere economically if we do not first acknowledge the link between our moral decadence and the country's downward economic spiral. Economic theories, such as Smith's invisible hands or Keynesian general economic theory, were all based on the prevailing circumstances at the time. We cannot, therefore, neglect our moral behaviors in our economic decisions if we intend to solve our economic problems.

Adam Smith's "The Wealth of Nations" was published in 1776 and is considered one of the foundational texts of modern economics. The moral and social background of Smith's work can be understood by examining the intellectual climate of the time and Smith's own philosophical beliefs. One of Smith's economic theory's moral foundations is self-interest. Smith's moral foundation in "The Wealth of Nations" is rooted in self-interest tempered by moral sentiments. He famously stated, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard for their interests."

Likewise, the social and moral foundations of Keynesian economics, as developed by John Maynard Keynes in the early 20th century, were rooted in the economic and social context of the time and Keynes's own philosophical beliefs. Keynesian economics emerged in response to the Great Depression and aimed to address classical economic theory's shortcomings. The question is: How are our social and moral conditions affecting our economic theories and public policy decisions?

The church has not done well after demolishing many traditional moral norms that instilled fear in people to conform to societal norms for the community's benefit. I remember my Natural Resource Planning professor explaining why our elders prohibited farming near rivers. That was to ensure rivers did not dry up. If social taboos were broken, they had repercussions.

It appears these social norms which we consider superstitious, have rationality. We call ourselves Christians but do not follow Christian norms. For many Christians in Ghana, Christianity has become a means to an end: what it can do for them and not how it can change them. Instead of transforming them, Christianity has given them compelling reasons to get rich by exploiting the poor through the prosperity gospel. The biblical prophet Amos, in Amos 8:4-6, denounced the ill-treatment of the poor by the rich and powerful in his society. Amos's message is relevant to contemporary Ghana, where similar issues of socioeconomic injustice persist.

Amos preached against socioeconomic injustice and wealth disparity: the concentration of wealth among a small elite. He criticized the widespread poverty and income inequality. The public sector wage bill alone took about half of the total tax revenue in 2017. The total tax revenue was GHS 32.2 billion, but wages and salaries for the public sector amounted to 14.4 billion cedis. One has to analyze these numbers against the background that public sector employees constitute 2.25% of the total population and about 4.26% of the active labor force in Ghana. In other words, about 50% of our tax revenue serves less than 3% of the total population. How can a country develop, given this lopsided income distribution?

The prophet also rebuked the corrupt political and bureaucratic elites exploiting their positions for personal gain, as well as the misallocation of resources and lack of accountability. Where are the true prophets in Ghana picking up where Amos left off?

I have often said that Ghana's economic problems stem from its moral problems. Corruption, dishonesty, fraudulent acts, swindling, and cheating have permeated our society's social and economic fabric. Corruption involving stealing government money or resources, kickbacks and bribes, over-invoicing, and siphoning domestic and foreign money through offshore banking activities has undermined the country's financial fortunes.

Lack of trust has made investing in Ghana difficult and risky because of anti-social practices. Many businesses have collapsed due to unscrupulous workers stealing from employers. Our moral decadence explains our unemployment problems. There are many Ghanaian citizens abroad who send billions of dollars every year. They are ready to invest in Ghana but afraid of employees' work ethics. The idea of the government employing a large army of unemployed youth in Ghana is an illusion. Federal, state, and local governments combined account for only 14% of employment in the USA. The private sector employs the remaining active labor force.

In Adam Smith's major work, "The Theory of Moral Sentiments," he explores the relationship between morality and economics by examining the ethical foundations of human behavior. Smith argues that humans possess a natural sense of sympathy and moral sentiments that guide their conduct. These moral sentiments include empathy, compassion, and the desire for approval and praise from others.

Smith suggests that individuals naturally care about others' well-being and opinions. He argues that moral judgments arise from our ability to imaginatively place ourselves in others' shoes and consider how our actions affect them. Smith says this capacity for sympathy allows individuals to understand others' interests and feelings, forming the basis for moral behavior. One has to ask why we do not see sympathy and empathy in our bureaucrats and politicians when it comes to amassing wealth at the state's expense.

However, Smith does not advocate for a completely unregulated market or unlimited self-interest as some dubious capitalists would like us to believe. He recognizes the need for moral considerations and the role of government in establishing legal frameworks and institutions. This is to prevent abuses, ensure fairness, and correct market failures. Smith believed that self-interest must occur within a moral framework that respects others' rights and well-being.

In "The Theory of Moral Sentiments," a book he wrote before "The Causes of Wealth of Nations," Adam Smith presents a comprehensive view of morality and its connection to human behavior and economic interactions. He argues that moral sentiments, including empathy and sympathy, are fundamental to our moral decision-making process.

We must, therefore, critically examine our moral behaviors and how they impact our socioeconomic outcomes. There is no reason a resourceful country like Ghana should hold a bowl begging for crumbs that fall from their masters' tables all the time. Political independence is never alone but walks with economic independence. There is a saying, "He who pays the piper calls the tune." So if we do not want the West to impose its moral values on us, then we must stop begging for crumbs from their tables.