Montoro Filho: Ethics has a clear economic value


Source: Jornal do Commercio Brasil - RJ, 24/06/2008

The former president of BNDES and president of Etco, André Franco Montoro Filho, commented on the economic value of ethical behavior. According to him, there are four questions posed by Nobel Prize winners in economics, Paul Samuelson and Joseph Stiglitz, which would be basic to the market economy. The first three, by economist Samuelson, who was awarded the prize in 1970, are what to produce, how to produce and for whom to produce. Later, Stiglitz, president of the Clinton administration's Council of Economic Advisers and awarded the Nobel Prize in 2001, added the question of who makes the decisions.


“There are two alternatives to this issue. The government can make decisions centrally through planning May or the market can be the agent and make decentralized decisions using prices as an instrument. In the past century, both theories were tested and the market proved to be the best system, ”he said.


Montoro Filho raised another question, how it is possible to have no planning that coordinates decisions and what avoids chaos in a system not centralized by the government. According to him, the theory of the invisible hand, proposed by Scotsman Adam Smith is the solution. The theory says that the market system has automatic coordination mechanisms, through the free competition of agents.


“For the invisible hand to work, it is necessary to ensure the right to private property, respect for contracts and conflict resolution mechanisms. The success of productive activities and economic growth depend on institutions, rules, uses and customs that provide the right incentives, creating a good business environment ”, added the president of Etco.