Author: Marcílio Marques Moreira

Source: O Estado de S. Paulo, 29/07/2008

Trying to understand the “culture of transgressions” in Brazil - leniency with impunity, ethical deviations, trickery - leads us to a theme that has received renewed attention among us: the relationship between ethics and economics. Among other concepts, it is necessary to evaluate the idea, or prejudice, that the market would be immoral or amoral in nature.

 

A series of scandals have sharpened contradictory tendencies: to excuse their protagonists in limine, since "everyone does", or to condemn them, especially if they are entrepreneurs whose only objective would be to profit at any cost in the globalized capitalist market.

However, as the Indian economist and Nobel Prize winner Amartya Sen reminded us, the divorce between economics and ethics does these two main branches of knowledge and doing a disservice and impoverishes both. In both Aristotle and Adam Smith, economics emerged as a branch of ethics, a relationship lost at the time of “savage capitalism”, but which is being rescued by modern free enterprise.

 

Correct relations between private agents, as well as between them and public authorities, demand mutual trust, which presupposes good faith and respect for the truth. Good faith, expressly accepted in the new Civil Code, is a premise of respect for perfect legal acts and contracts, an indispensable condition to ensure a business environment capable of attracting productive investments, both national and foreign.

 

Emphasizing compatibility between the market and ethics does not mean that the market is perfect. On the contrary, market imperfections have already deserved to be welcomed in theory dedicated to them. In order to correct them without suffocating the virtues of the market - an efficient coordinator of expectations and economic decisions - the regulatory State is required.

It turns out that the state is also not perfect. At the intersection between it and the market, the greatest risk of misconduct, conflicts of interest, exchanges between political favors and economic advantages and the capture of public policies by special interests arises. To avoid them, it is up to the independent, impersonal and reliable regulatory agencies to serve as a natural interface between government and the market.

 

That was why the regulatory agencies were created, when the privatization process - until now misunderstood - transferred from the public sector to the free initiative the ownership or operation of companies subject to the concession regime, since the market has better conditions to mobilize and allocate resources.

Unfortunately, they have not received support to carry out their functions independently and effectively. In Congress, the project has dragged on for years to give them a solid legal framework, while the Executive has treated them with suspicion, taking away the conditions of effective functioning.

 

Private managers and public administrators are subject to the same fundamental principles included in the Constitution - legality, impersonality, morality, transparency and efficiency. Both the market and the State are nourished by trust, a crucial link in a healthy social fabric. This, in any political regime: capitalism, socialism, solidarism or communism.

 

Another prejudice to be overcome is that which questions the very morality of the pursuit of profit. We all need to breathe to live, but we don't live to breathe. In the same way, the company has to generate profits to invest and survive. But he does not live to profit. Profit serves the company, not the company for profit. In addition to generating profits for itself and its shareholders, the company has a responsibility towards its employees, its customers and suppliers, the environment and the communities in which it operates. And you have to respect the laws and pay taxes.

 

The company's profit cannot, therefore, be generated by tax evasion or subterfuge, nor at the expense of competitors. Unfair competition, in addition to damage to the purse, disfigures the most effective market instrument - business competition.

The modern company demands efficiency, productivity, quality of products and services and has to reach them with ethical awareness and social responsibility. In doing so, it is exercising its own role and contributing to the promotion of sustainable economic development and of public and private life worth living.

 

* Marcílio Marques Moreira is president of the Advisory Board of the Brazilian Institute of Ethical Competition ETCO.