Introduction: rethinking ethics, economic theory and public policy

The question of the inevitability of an ethical economy is examined. Its opposite, the fundamental incompatibility of an ethical economy is critically assessed. A fundamental contribution of this book is to demonstrate that ethical behaviour is viable in a vibrant market economy and can serve as an engine of equitable economic growth and development. Improvements to working conditions, a greener economy, gender rights, human rights are all compatible with a dynamic market economy. But being ethical is not inevitable. Ethical and unethical firms can co-exist over time. Much depends on institutional frames, mental models, preferences, market forces, consumer preferences, information and power relationships. Also, freedom of choice is discussed as being fundamentally important to an ethical society. But freedom of choice and the ability to realize one’s preferences critically depend on whether one has the capabilities to form and then act upon one’s true preferences. Institutional parameters are critically important. More important than nudging individuals to do what experts believe to be in the best interests of the individual is the construction of a decision-making environment where individuals can make decisions that are welfare and wellbeing improving.