Economists have moral compasses that are suspect to being overruled by any variety of unrelated concepts: utility, loss, advantage, opportunity cost, maximisation, and so on and so forth. They claim to be disciples of the market, astute learners whose educations piqued in one area, and one area only. It is suprising, then, for an economist — much less a former banker — to be spotted using that dreaded word, ‘moral,’ which has caused many an economist unspeakable terrors. The man responsible for that is Raghuram Rajan, a professor at the University of Chicago, former governor of the Reserve Bank of India, and popular economist.¹

    Prof. Rajan, in an article entitled ‘Pursue Self-Interest by Helping Other Economies too’, and in the midst of bankerly chit-chat, opines that “targeted transfers, sufficient to support life, are morally right.” He speaks, most certainly, of the prevention of privation — an admirable idea, one that must be presented everywhere it can be implemented, as Hayek pointed out in his Road to Serfdom — but here presented as a maxim, without reasoning. It is asserted that the prevention of privation is “morally right”, but why? The next part of the puzzle may prove to be more helpful: these transfers, Rajan admits, “supportive of demand, and may keep anger from exploding into social conflict.” Protection against privation, then, is not a ‘moral’ good, strictly understood, but for Prof. Rajan only a means to an end that can be put into plain sight here.

    The view of the household that Prof. Rajan advances here — a view that does not take much effort to discern from merely a single sentence’s worth of reading — is that they must be provided means to support demand and prevent resentment against the rich or against the state. These households are means to an end, but not ends in themselves: for economists of most sorts, they are fungible numbers that can be quickly replaced with another. But more tellingly, they must be placated to prevent unrest. They are unruly babies, for Prof. Rajan, not the manqués that Oakeshott characterises them as. The household is a means to the end of desirable goods — high demand, no questions, only the state. The recommendation here is that one ought to utilise whatever monetary resources the state has available to licitly bribe the masses, with the effect of staving off  discontentment.

    The article’s title, ‘Pursue Self-Interest by Helping Other Economies too’, is worthy of comment, too. It reminds the reader that the only maxim for the economist is a return to nature — a dubious, hideous nature befitting of Frankenstein, not Man. The Homo Economicus — ‘rational’, self-maximising man — is the ‘nature’ of the species of which economists seeks to be the science of. And in this ghastly world, the only ‘rational’ explanation for benevolence is that it must yield some degree of benefit in return. Benevolence and charity, unfortunately, do not exist in the world of the economist: only self-maximisation, rationally conducted.