Philosophical problems of economics in the Modern Era

Avakyan-Forer Armina Genrikhovna PhD in Philosophy PhD in Philosophy, Educator, the department of Ontology and Theory of Cognition, Voronezh State University 394000, Russia, Voronezhskaya oblast', g. Voronezh, ul. Universitetskaya Ploshchad', 1 philVSU@mail.ru Other publications by this author

In the era of Modern times, serious changes are taking place in the economic life of society, the machine industry is emerging, banks and joint-stock companies appear. This time is characterized by a powerful civilizational breakthrough. In the era of Modern times, the connection of philosophy with economic science is emerging. It is during this period that philosophers and thinkers begin to explain the picture of the world not from the point of view of religious ideas and teachings, but by reinforcing their theories with research and innovative achievements. During this period, scientific knowledge comes to the fore in the process of forming a social worldview. Science, in turn, is based on experience and reason. "Among the factors that influenced the evolution of economics are, firstly, the emergence of new problems caused by the development of economics and requiring philosophical reflection, and secondly, the evolution of the internal logic of the development of economic theory itself"^[1]. Such a worldview will soon finally eliminate medieval theocentric morality and begin to build the foundation of new economic relations. At this stage, holistic economic theories are emerging, imbued with a single idea. This is due to the fact that capitalist relations are emerging, which completely replace feudalism. Market-capitalist relations are spreading all over the globe, and the world market with its own laws and peculiarities of functioning is being formed. Such socio-economic soil becomes beneficial for the growth of different economic directions. Thus, we can say that the economy as a system of knowledge about the economic life of society was formed during this period, since the appearance of the first economic schools.

The first economic school is mercantilism (from Latin. - trade), the subject of which was trade, considered foreign trade as a source of wealth. One of the popular mercantilists, Antoine de Moncretien, is famous for introducing the term "political economy" into scientific circulation. Despite the fact that the mercantilists limited themselves empirically to observing phenomena and reduced all economic forms to a one–sided and only one - monetary, they undoubtedly made a huge contribution to the development of economic theory.

Another economic school or direction was the school of physiocrats (from Greek. – "the power of nature"). The founder, Francois Quesnay, in contrast to the mercantilists, promoted the idea that only based on the exchange of goods it is impossible to become rich – wealth can bring a "pure product" – labor in agriculture with an excess of produced products over consumed products.

The Classical School of Economics (A. Smith, D. Ricardo) promoted the idea that economics is the science of wealth. Considered the conditions in which wealth was produced and accumulated. The main idea in Smith's teaching is the idea of liberalism, minimal state intervention in the economy, market self–regulation based on free prices that develop depending on supply and demand. Adam Smith's teachings contained rational seeds, which was a completely new phenomenon of its time. Attaching great importance to the increase in labor productivity – its division, the thinker created a teaching that is still relevant today. Thus, in the Modern era, economic ideas and principles were created and cultivated, which have great weight and significance to this day. In general, we can conclude that the economy and the philosophy of economics that has emerged in parallel with it are products of Modern times. Economics was looking for new ways to meet human needs, and the philosophical analysis of economic problems helped to identify the relationship between personal gain and ethical norms.  The philosophy of economics of Modern times proceeded from completely new foundations. If in antiquity philosophy retained the palm of primacy, in the Middle Ages it gave way to religion, in the Renaissance to art, then in the Modern era it gave way to science. In connection with these transformations, the main characteristic features of this period are: sciencentrism – the understanding that science is good, serves life and practice, bringing only benefits; desacralization – the loss of religious values; anti–scholastic direction, which consists in combating religious dogmas and metaphysical teachings. Such changes, both in philosophy and in economics, have formed new attitudes to man, to nature, to work, to trade, to wealth. Let's take a closer look at these new relationships below.

Attitude to a person. The purpose of a person acquires a new meaning. A person is understood as a thinking rational subject in all spheres of life. "I think, therefore I exist" (R. Descartes). A person realizes that he is just a person who opposes the vast world. Man is a being of a special kind, interested in the world, but not in the world in general, but in his human world. An important obligation of a person is to fulfill his own duty to God and to society. Also an important factor is the need for self-improvement, the acquisition of new knowledge. Valuable are such qualities in a person as decency, diligence, enterprise.

Attitude to nature. The thesis becomes important: "Nature is not a temple, but a workshop." Nature before the science and technology of Modern times acts mainly as the technical material of labor. Man seeks domination over nature under the motto F. Bacon's "knowledge is power".  Nature is considered as an object of industrial exploitation. Subject-object relations are being formed. A person as a subject influences nature, an object, in order to make life more comfortable. Such a one-sided utilitarian attitude to nature is connected with the general active and practical spirit of the time, reflecting new needs and opportunities.

Attitude to work. Modern times are characterized by the principle of division of labor. Every object, every thing is the product of someone's activity. Thanks to the development of trade and industry, a person realized his strength and his role in the life of society and understood that everything depends on him, he needs to rely only on himself. Labor turns into a "business" (business), the main goal and criterion of success of which is to make a profit.

Attitude to trade. Scale is beginning to prevail in trade, as strong economic ties are being established in many places. What a big place the market occupied in the life of the townspeople is told by the proverb that developed at that time: "Everything will be sold on the market, except silent caution and honor." New ways of farming are being developed and tools are being improved. Strong economic ties are being established between different regions of Europe. Economic behavior becomes an independent branch of human knowledge in the socio-economic sphere.

Attitude to wealth. Wealth becomes a positive value. The idea is developing that a person by nature has certain rights not only to life and freedom, but also to work and its results.  Therefore, any method of quantitative increase of wealth is thought of as a good regardless of its ethics.  Wealth is understood as a path to independence and freedom of the individual from the cruel laws of society.

In conclusion, we will consider the socio-philosophical concepts of the New Time.Many philosophers in their works address the problem of the moral component of economics. There are various philosophical interpretations about the economic relations of this time. Studying and analyzing the ideas of thinkers, we have identified three different approaches to the problem of the correlation of economic aspirations and moral values.

The first approach asserts that morality is the basis of human nature. The main motive of human activity is ethical values. Proponents of this approach are John Locke (1632-1704) and Jean-Jacques Rousseau (1712-1778).

In his writings, J. Locke and J.-J. Rousseau prove that the moral sense is fundamental in human nature. J. Locke was an ardent opponent of the concentration of excessive property in one hand. The philosopher believed that profit is not the basis of an act, it only obeys the command. Therefore, a person has enough of what is required to meet his basic material needs.  Nature grants humanity a limited amount of benefits. "Food, clothing, jewelry, wealth and all other benefits of this life are common property, and when everyone grabs as much as he can, as much as he adds to his property, he takes away from others as much, and no one can get rich without causing loss to another"^[2].

The ideas of J. J. Rousseau are based on the fact that morality is the basis of human nature. An inner voice, conscience dictates a person how to act in this or that case: "Go into yourself and listen to the voice of your conscience"^[3]. For J. J. Rousseau, there are two natural principles in man:

- selfishness, which is expressed in the desire for self-preservation,

- and compassion, which limits selfishness.

For J. J. Rousseau, there is a huge difference between self-love and self-love. Self–love is a feeling that reflects an individual's attitude to himself, compared with others, and moral and social evil is rooted here. And selfishness is morally neutral. The philosopher condemns work for the sake of profit, believing that the pursuit of a secure future destroys life in the present and does not allow a person to be himself. The thirst for increased material goods generates more needs, on which people are becoming increasingly dependent. For a thinker, moral ideals should not be subordinated to economic needs.

The second approach asserts that everything that benefits is morally valuable. This means that economics and morality can coexist in unity and are closely interrelated. Economic rationality becomes the main motive of human activity. Supporters of this approach are Thomas Hobbes (1588-1671) and Adam Smith (1723-1790). T. Hobbes and A. Smith proposed the position of reasonable egoism.  T. Hobbes believed that human nature is selfish, and the desire for self-preservation and satisfaction of needs is natural. But limited resources do not allow everyone to satisfy their needs equally, and this leads to rivalry, distrust, fear for their property, mutual hostility. Therefore, the natural state of people is a war of all against all. In the relations between people there is a principle of "man to man – wolf". Hobbes wrote: "In matters of morality, with a huge variety of people's tastes, there is nothing obligatory, and everyone can do what he personally sees as good." This means that virtue is established by each person separately. Morality according to Hobbes is valuable as much as it is useful.

A. Smith attaches special importance to the ideas of T. Hobbes: he recognizes egoism as a natural property of man and a condition for the progress of society. This is how the division of labor develops: people help each other, but they only think about their own good. "It is not from the benevolence of a butcher, brewer or baker that we expect to receive our lunch, but from their observance of their own interests. We do not appeal to their humanity, but to their selfishness, and we never tell them about our needs, but about their benefits"^[4]. According to A. Smith, the strongest incentive is the natural desire of people to improve their financial situation. The thinker understood that the society in which he lived was still under the pressure of medieval morality. This is what contributed to the fact that the economy was not developing, and society as a whole needed new ethical guidelines that could point the way to prosperity. Thus, it can be noted that rational egoism sets the benchmark for material wealth, accumulation and multiplication of capital.

The third approach puts economic interests at the forefront. The main motive of human activity becomes personal gain and private interest. Such an emphasis is seen in the theories of Claude Adrian Helvetius (1715-1771) and Bernard de Mandeville (1670-1733). A different approach is proposed by K. A. Helvetius and B. Mandeville, presenting a position that considers personal interest to be the main human property.

K. A. Helvetius believed that the origin of actions are two feelings – love of pleasure and aversion to suffering. "Hunger, therefore, suffering is a source of activity for the poor, that is, for most people, and pleasure is a source of activity for people above need, that is, the rich"^[5]. In economic activity, it is necessary to understand the ultimate goal, the reason for the accumulation of wealth. To desire pleasures and riches for happiness is natural, necessary and reasonable, you only need to be able to use them.

B. Mandeville, like K. A. Helvetius, believed that the basis of human behavior is the natural desire for self-preservation, expressed in the desire for pleasure. But in society, a person is forced to subordinate his aspirations to the common good. Therefore, morality is an artificial phenomenon.

B. Mandeville in the essay "The Fable of Bees, or the vices of private individuals are benefits for society", the bee hive embodies a human society that can exist only thanks to vices: "In order to become a great nation, vice must nest in it; Prosperity – everything is a witness – Only virtue will not give it"^[6]. According to the thinker, it is impossible to enjoy the benefits of life and at the same time be virtuous, because it is immoral behavior that creates demand for goods and services, gives an opportunity to show ingenuity and diligence. So, honesty and trade contradict each other: "Where is the merchant who never praises his goods against his conscience, greatly exaggerating their merits so that they sell better?"^[7]. In B. Mandeville's theory, the satisfaction of material needs and the pursuit of luxury and wealth is a natural and logical basis for people's life in society. It can be noted that the third approach becomes the main one after the New Time.

Thus, summarizing, we can note that in the first approach, morality is the defining aspect of economic behavior. According to philosophers, virtue is an innate property of a person, and it should be the basis of economic relations.

The second approach reveals the mutual benefit of people in economic relations. An economic person, receiving personal benefits, increases the total wealth of the economy. The orientation of the search for mutual benefits, ideas about the greatest amount of happiness in society, reasoning about the common good makes possible the harmonious coexistence of ethics and economics.

The third approach emphasizes the connection of material prosperity with depravity. It is believed that morality should be completely eliminated from the market economy. The flourishing of commerce has a negative impact on the formation of virtue. The goals of economics contradict the goals of morality and cannot coexist in unity with it. 

Thus, it is in Modern times that philosophers begin to study economic phenomena in depth and create various concepts, raising socio-economic issues. Economic issues were considered before this period, but it is in Modern times that economic teaching in the development of society becomes an independent sphere. Ancient thinkers, medieval theologians and Renaissance humanists were only forerunners of the philosophical approach to economics.