Effects of Values on Economics Essay

Values can be described as beliefs that people deeply hold to. They guide the decisions and behaviors of these people. They are â€Å"located† deeply within the subconscious and are integrated into every area of everyday living. People use values to choose their behaviors, employments, friends, entertainment and sports among others. Values are assimilated to people especially when they are still young. They range from teachers, parents, coaches and clergy to even peers. Values assimilated during the early years of a person’s life operate subconsciously as a basis for making decisions, choices and behaviors (Lopper, 2007). On the other hand, economics can be defined as a social science that deals with production, distribution and the consumption of services and goods and their management (Princeton, 2006). This research paper is aimed at examining the role of values on economics. Religion and Economics Many have for a long time regarded religion and economics as separate as cheese and chalk despite the fact that Adam Smith in his 1776 book The Wealth of Nations touched on religion (Weber, 2004). Many economics regard religion as a dark world which is unreachable through their analytical tools. It should be noted that religion is such a wide field that economics cannot ignore and as years erupts the gap between the two fields have gradually been reduced. This was initiated by an economist from the University of Chicago, Gary Becker who has already won a Nobel price for his efforts to applying economics in studying drugs, family interactions and crime (Weber, 2004). Though economics treat some theological questions such as the nature of God as if they were lepers, they have of late studied the earthly subjects of how people â€Å"sell† and â€Å"buy† services and goods, whether spiritual or material, that is provided by the religion. More study and research on religion have been undertaken after the attack of the United States on September eleven by the militant Islamic groups. Economics professor, Laurent Lannaccone from George Mason University in his statement agreed that for a long time the economists had ignored religion because of the belief that it would be overtaken by the ever-growing secularization; later however, many have realized that religion is also a powerful force in the modern society (Weber, 2004). Of late, another concept â€Å"the economics of religion† has been framed that is founded on the belief that human beings are rational in choices about their religion in the same way they are in economics, for example buying a good. â€Å"Producers† of mosques, temples, synagogues and churches compete for members (who are in this case their customers) and this they do by drawing those who are secular or members of other congregations (Weber, 2004). Effects of religion on the economy Religious rituals and beliefs have distinct effects on the performance of an economy. Preliminary results from researches conducted have shown that that there are negative effects resulting from participating in religious rituals but those on religious beliefs have shown positive effects (Bowman, 2004). It has been argued that religion has both positive and negative effects on the economy. Some have argued that religion can bring material advantages with Max Weber arguing that the work ethics by the Protestants was the cause of the prosperity in Europe. Recently, a professor at Harvard, Robert Barro is working towards examining the links between economic growth and religion (Bowman, 2004). In his studies, he concludes that at the microeconomic level, religious participation has been associated with lowered rates of drug abuse, crime and other vices. Another economist from Harvard, Richard Freeman concluded in his studies that those black youths who go to church were likely to abstain from committing crimes and using drugs as well as having a higher tendency of attending schools (Bowman, 2004). However, in economic terms and richness, no quantitative research has proved that religion has any direct effect on the income and if any by what level. This has been hindered by the difficulty present in dividing the cause and the effect. Even if the church goers may be reported as richer, there may not be any tangible proof that it is the religion that made them richer because it is possible that it is the richer people who may be likely to go to church or become generally religious. Unrelated traits for example personal discipline or greater ambition may be the reason of one succeeding in his or her job and at the same time attend to their religious duties (Bowman, 2004). Mr. Gluber, states that one possible cause of religious people being rich is that as they attend either mosque, church or synagogue gatherings, this can yield â€Å"social capital† which is just web of relations that fosters trust. These relations are important as they allow business dealings and transactions between such people to become smoother and cheaper respectively. The other possible reason that is given is that those who are religious have better emotional and financial insurance. This is important because when they fall into an economic setback, they are able to recover more quickly because of the support from their fellow worshippers (Bowman, 2004). Mr. Gruber’s results also claim that religious people especially the church goers may become richer as attendance to places of worship may also lead to lesser chances of dropping from schools. Also religious groups have been known to support the education of their members by offering bursaries either directly to the students or to the schools that they manage (Bowman, 2004). Also, many religious groups have been known to motivate their members to work hard towards their success and this may be a contributing factor to their wealth increase. Religion also teaches on supernatural intervention in the members’ endeavors and this allows them to be focused on success than failure (Bowman, 2004). Negative relationship between religiosity and economics growth There are general negative effects in the relationship between religiosity and economic growth. One such is the fact that religious groups, especially Christianity, preach giving which is regarded as a factor that undermines investment which is a setback to economic growth. Another setback of religiosity to the economic growth is that it is accused of undermining the work ethics using its own teachings as a cover up. Many members of religious groups have been known to remain idle or being lazy and instead substitute work with their religious duties. It is also reported that many religious groups teach doctrines that oppose modern attitudes such as contraception technologies and market’s egalitarian repression (Bowman, 2004). On the other hand, economic development has got negative effects on religion with the studies showing that overall development (represented by per capita GDP reduces religiosity. The secularization thesis has shown that people tend to become less religious when income increases. They loose interest of attending religious meeting places and portraying their religious beliefs. Economic growth makes religion to be less considered in policy making, political process, and legal process and also in social programs such as friendships, marriages and colleagues (McClearly, 2008). Though Max Weber’s thesis â€Å"The Protestant Ethic and the Spirit of Capitalism† indicate that religion raise productivity for they mold individual characters such as work ethic, thrift and honesty, it also shows that it religious beliefs have a negative effects on economic development as increased attendance to their places of worship take more of their resources and time . The religious sector is also known to place restrictions on markets for insurance and credit (McCleary, 2008). The other negative effect of religion on economics is that it produces religious terrorism that has been as a result of income inequality and poverty. In contrast, research conducted by Alan Krueger shows that religious terrorists in most cases are well educated and not from poor background. Many religious terrorists view violence not a means but as an end to economic and political ends. They feel that they are destroying a system that they are not identified with (McCleary, 2008). Marx idea on religion According to Karl Max, religion is an expression of economic justice and material realities, meaning that problems in any given religion are also the problems in the society. Max referred to religion as a symptom and not a disease (Cline, 2009). He also claimed that religion has been used by the oppressors to encourage those who are exploited and poor. He stated that religion speaks contrary to what â€Å"is dignified in a human being by rendering them servile and more amenable to accepting the status quo†(Cline, 2009). He argued that religion is dependent on economics meaning that the actual doctrines of religion are irrelevant. Also religion is an illusion giving excuses and reasons so that it can keep the society to function as it is. â€Å"Much as capitalism takes our productive labor and alienates us from its value, religion takes our highest ideals and aspirations and alienates us from them, projecting them onto an alien and unknowable being called a god†(Cline, 2009). India- Caste system due to Hinduism Caste system is a religious ranking system in India of human groups that is based on occupation and hereditary factors. This system is very complex and has been known to have several setbacks. The members of these groups are restricted to their hereditary occupations. The Indian society is divided into four groups; Brahmas are from priestly families, the warrior and ruling class, Vaishyas are businessmen, farmers and traders. The laborers and peasants are the shudras while panchamas were the untouchable. The negative effects of the caste system are that some members of the community are discriminated based on their groups. However, due to higher education, globalization, economic growths and mingling with people from other communities, the India’s population is slowly deviating from the caste system. Even the government of India has decided to reserve some jobs for the members of the lower castes (FactsaboutIndia, 2008). Islamic Countries and Shariah Laws In the Islamic nations governed by the sharia laws, no interest is allowed to be charged on any loan that is given as it goes against the Koranic law against usury. In some countries such as Afghanistan, women are never allowed to wear high heel shoes as well as white socks, as the sharia considers them sexually luring. In the same nation, music is never allowed that includes cassettes in vehicles. Many forms of entertainments such as watching movies or plays are never allowed with women being prevented from occupying some professionals and occupations which, causes some to flee the country or commit suicide (Aluko, 1999). Men who do not have beard up to certain lengths are never allowed to have some jobs or allocated some contracts; this means that women do not benefit from any government contracts in Afghanistan. In such countries, Shariah views Islam as a philosophy of life, social order, a system of economic principle and a ruling order which all the Muslims must adhere to (Aluko, 1999). The ethics of Islamic economics rejects excessive concern for the accumulation of profits but more with acquisition of goods fulfilling social obligations to the society. The other characteristics of Shariah laws include tax discrimination on non Muslims so that they can be encouraged to become Muslims. On inheritance, the Koran states that brothers must get double of what their daughters get (Aluko, 1999). United States- Effects of Christian values In US, it has been noted that people have more consumer choice in exercising their religions than any other part of the economy. Churches function independently as contractors in the religious free market of the United States. In USA, Evangelical Protestantism is known for entrepreneurial development in the church structure in contrast to the Roman Catholic Church that follows the ecclesiastic polity (Sparks, 2007). The evangelical churches have their congregations or appointed boards have the final say on any matter such as the church budget. In some mega churches however, the pastor is seen as the Chief executive officer exercising high level authority. The churches in the United States are known to offer not only spiritual nourishment to their members, but also other products such as music and video tapes as well as books (Sparks, 2007). Sale of alcoholic products on Sundays has not been allowed in many cities of the United States as Sunday has been regarded as the day of worship for the Christians (Andre, 2009). Abortion Effects of Rights on Economics Freedom has been termed as the engine that pushes economic growth that is sustainable and allows all people to have increased prosperity. Economic freedom is basically ensuring that human rights are respected (Kim, 2007). Equality- Women Rights Promoting gender equality has been understood as an important part in an effective economic and human development strategy. Gender equality in education has positively been associated with economic development. Research previously done has shown that any nation that does not work towards the closing of gender gap in education will experience a fall in per capita income (Chen, 2004). In addition the report by the Arab human development team showed that lack of women empowerment has contributed to less human development in the Arabic regions. If women are enabled to acquire education for example through distant learning, it will allow them to participate in labour market while at their homes and this would in turn result in improving gender equality. It has been shown that nations in the sub Saharan Africa, South Asia, North Africa and Middle East has a greater gender disparity especially in education and if they could only close this gap, their per capita GDP can grow significantly per year (Chen, 2004). The reasons that are raised to prove these arguments are that educated women are often added to the labour market and this improves the economy of the country. The other reason is that educated women will improve the intellectual environment at home that in turn leads to a productive workforce thus economic growth (Chen, 2004). The proponents of slavery stated that they relied on servitude so that they can facilitate their need for labour. The labor population was decreasing and thus they believed that African slaves were efficient to fulfill their needs for laborers. When tobacco was discovered in 1600’s and became the main source of income for the colonialists, it called for more land and thus more laborers. Slave trade brought a great fortune to the colonialists; unfortunately, the profits obtained were used to get more slaves (Dodson, 2003) Spanish colonies- encomienda and repartamiento The encomienda was a labour system employed by the crown of Spain during its colonization in America. Some trustees and soldiers were allocated a specific number of natives whom they were supposed to teach Spanish and Catholic faith and in return receive tribute from the natives in form of labour or gold. This allowed the encomendero to take even the land that belonged to the natives (Answers Corporation, 2009). On the other hand, repartimiento was a system applied by Spanish colonialists on native population of America where the later was forced to perform some tasks for the former for a period of time in the year without any pay or for a low pay. This system led many natives to flee from their communities while other accepted to work and even signed contracts for the period that they were to work (Answers Corporation, 2009). A property right is the authority that allows one to determine how a resource should be used. All economic goods are protected by the property rights. Property rights have been confirmed to play a major role in the promotion of both political and economic development. Intellectual rights are mechanisms that facilitate innovation by giving the inventors monopoly of their discovery (Robin). CONCLUSION From the discussing, it is clear that different values have different effects on the economics. These values include the religious values which have been discussed with examples of the Shariah law, the caste system of India and Christianity in the United States of America. Other values discussed include those related to human rights such as women rights, slavery and property rights.It is vivid that different values have either positive or negative effects on economics or even both. REFERENCES Andre. (2009). Sunday alcohol sales; Fear versus the facts. Retrieved March 25, 2009, from http://www. peachpundit. com/2009/02/25/sunday-alcohol-sales-fear-versus-the-facts/ Aluko, S. A. (1999). The social and economic implications of Shariah law. Retrieved March 25, 2009, from http://www. dawodu. com/aluko1. htm Answers Corporation. (2009). Encomienda system. Retrieved March 25, 2009, from http://www. answers. com/topic/encomienda-system