French economist Jean Tirole awarded the Nobel Prize in Economics, delivered a public lecture in Tashkent this week. During the lecture, he talked about the key concepts from his renowned work Economics for the Common Good. Kursiv Uzbekistan shares the main ideas from his speech.
Common good
The concept of the common good was the focal point of Tirole’s lecture. He expressed his view that economics is not just a technical field but a philosophical science that allows for integrating moral values. Tirole emphasised that the ultimate objective of economics and other social sciences is to contribute to creating a better world for all individuals. This necessitates the reinforcement of social responsibility.
Tirole proposed that to comprehend the idea of the common good, individuals should envision the type of environment in which they would like to reside, setting aside their current social status. This mental exercise enables us to delineate the essential attributes of the common good, a fundamental aspect of Tirole’s work.
Tirole acknowledged that real-life scenarios often present conflicts where the common good clashes with the interests of individuals, businesses, or nations. Instances like individuals refusing vaccination, banks risking customers’ funds for profit, or states prioritising national interests over global values highlight these conflicts.
Tirole also stressed the significance of addressing disagreements among prominent political figures and managing conflicts of interest. His research is focused on developing strategies for organising politics in such challenging situations and building a modern state.
Morality of the market
It is essential to consider the conditions necessary for the common good to be the goal of economic development. A solid legal framework, anti-monopoly mechanisms, and citizen protection are essential. Promoting an atmosphere of tolerance and, encouraging economic behaviour prioritising the common good are important. When properly regulated, the market economy can be central to financial organisation and should not be considered immoral.
However, there are challenges that prevent the market economy from naturally seeking the common good. These challenges include the lack of social responsibility among market players, the human factor in politics leading to short-term initiatives and the tendency for individuals to justify antisocial behaviour. Addressing these challenges by promoting corporate social responsibility, supporting good actions by individuals and introducing narratives into the public consciousness that combat these factors is crucial. This could involve sharing stories of moral choices and immigrant experiences. By addressing these challenges, we can work towards creating a more socially responsible and common good-oriented economic system.
The role of the state
The state, as the Nobel Prize winner suggested, has three important roles in a society like this.
Firstly, it needs to be regulated. This means correcting the market economy’s failures to ensure the common good.
Additionally, the state can drive promising economic directions towards the ultimate goal. This involvement can take the form of direct actions, such as funding breakthrough innovations and more subtle contributions, like providing infrastructure and a legal framework.
Finally, the state must delicately manage the market through budget constraints and policy prescriptions. Understanding the modern state, including perceptions and cognitive distortions, is crucial for good policy, as highlighted by Tirole.
Jean Tirole emphasised that economic and social analyses aimed at achieving the common good can help address key societal challenges.
This year’s Nobel Prize in Economics was awarded to the authors of the book “Why Some Countries Are Rich, and Others Are Poor”, as reported by Kursiv Uzbekistan.
