The Economics of Goodness

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From an article by Michael O. Leavitt, former Governor of Utah and U.S. Secretary of HHS.
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The moderator started the meeting by describing a hypothetical scenario. “Pretend,” he said, “that the year is 2015.” (This was in 1999.) He said, “Think as though you are looking back over the last 15 years. What would the most surprising thing be that happened during that period of time?” 

One of the participants began to respond with some smart thoughts about the future. A banker spoke of the paperless currency systems that would begin to emerge. An oil executive talked about tensions in the Middle East. A technologist began to talk about faraway reaches of digitalization.

I was feeling this growing pressure that I needed something cogent to say. But in the final analysis, diversion seemed like the best strategy for me in that setting. So I said this: “Since we are all reflecting on the future, I am going to tell you who won the 2015 Nobel Prize in Economics. The big surprise is not who won. The big surprise is that the Nobel Prize in Economics was not won by an economist; it was won by a sociologist who advanced a new economic theory called the economics of goodness.

“It is a simple but a powerful idea. Every nation or state has economic assets that produce wealth. It may be minerals. It may be a seaport. It could be a favorable climate. 

"But there is a universal asset according to this economics of goodness that has immense value, and it is inherent in any community that will use it. It is the power to simply do the right thing, voluntarily.

“Let me illustrate... Imagine the economic heft of a nation or a state or a community free of drug or substance abuse. Healthcare costs would plummet, worker productivity would skyrocket, families that
had been torn apart by abuse and financial hardship wrought by substance abuse would remain together. Social welfare roles would fall, there would be fewer children who needed protective care, there would be less violence, and society would build and maintain fewer prisons. 

Imagine the power of a nation that was able to invest all of those resources in education or in investment or in research. Such a place would prosper.” 

For a moment, there was silence. And then a surprise. One of the participants practically
shouted at me, “What do you mean by ‘goodness’?” He said, “You’re turning this into some
kind of religious discussion.”

Before I could respond, a very well-known economist beat me to it. “Not true,” he said. “I’m an atheist. And this isn’t about religion. It is about human behavior and the predictability of its consequences. People who work hard do better than slackers. Those who are honest get in less trouble than those who cheat. People who are kind have more friends than those who are cruel. Communities where people serve one another and care for each other are safer than those where that’s not true.” I have to say that may be the first time I ever said amen to an atheist.

But the economics of goodness applies to individuals as well as nations. People who work
hard, who are honest, and who are reliable have a better chance of success than those who don’t
do those things....

The economics of goodness is not a new idea. And it is not simply about money. Willingly
doing the right thing produces superior outcomes.