Morality, Rationality and the Problem of Order in Economics

Conventional neoclassical economics is based on a utilitarian conception of morality and rationality in the sense of maximizing utility. The present paper, reviewing the results of the discussion about the two concepts of morality and rationality in conventional economics, proposes the hypothesis that this approach is ascribed to neglecting institutional dimensions of economy using an analytical method. The research findings show that reducing morality to selfishness and rationality to logical accounting are behind the negligence of institutional dimensions of economics, which caused neoclassical economics fail to explain the social order resulting from economic action. This problem can be solved by providing a more comprehensive definition of morality and rationality linked up with social order. To this end, there is a need for social morality which manifests itself in the form of values and norms and in a kind of institutional structure which has priority over personal morality governing the society. When social order is introduced to economics the relationship between economics and social order can be set forth, but then a new problem relating to the criterion of selecting a basis for social morality will arise. This problem represents a fundamental challenge to all economic schools including Islamic Economies.