Table of Contents

Handbook of Economics and Ethics

Handbook of Economics and Ethics

Elgar original reference

Edited by Jan Peil and Irene van Staveren

The Handbook of Economics and Ethics portrays an understanding of economic methodology in which facts and values, though distinct, are closely interconnected in a variety of ways. From theory building to data collection, and from modelling to policy evaluation, this encyclopaedic Handbook is at the intersection of economics and ethics.

Chapter 68: Solidarity

Patrick J. Welch and Stuart D. Yoak

Subjects: economics and finance, behavioural and experimental economics, history of economic thought


Patrick J. Welch and Stuart D. Yoak With the expanding global marketplace dramatically changing business relationships it is reasonable to question whether the traditional neoclassical economic model based on self-interest, which was largely adequate for explaining and justifying outcomes of business relationships in more homogeneous geopolitical and cultural settings, is losing its viability in this broader and more complex setting. Alongside concern about the viability of the traditional model, we might also ask whether there is an alternative to which we can turn. The answer is yes. In addition to the traditional model there is an emerging solidarity-based model for evaluating business behaviours that build on respect for others. Solidarity has been characterized as the ‘third principle’ between classic economic liberalism and communitarianism. According to Cima and Schubeck, ‘[solidarity] tries to balance the first two by affirming how individuals, groups, and government ought to see themselves in relationship to each other . . . [It is] based on knowledge, trust, and friendship that moves the parties to do business together’ (2001, p. 226). Globalization and its implications for business relationships One of the strongest forces stimulating change in business relationships in recent years has been the rapid globalization of economic activity. The magnitude of globalization’s expansion can be understood by comparing the growth of countries’ exports and imports with the growth of their gross domestic product (GDP). For example, in the United States in 2005, real (inflation adjusted) GDP was slightly more than 50 per cent greater than in 1990, while real exports...

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