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Economic ethics or economics as (our) ideology (by Tomáš Sedláček)

Economics at first glance seems to be a technical science: a neutral, value-free field, in which value and optimal production, prices, profits are impersonally calculated. A social science considered by many to not even be a social science, but rather an exact science, a science similar to physics.

But it is a lie to take such an ostensible view of the study of economics. Behind the curtain of numbers and equations it is not a hollow neutral nothing (as one would have expected or would have liked to) for the sake of a sterile, clinical analysis, but the whole panoply of something does not accept what is not talked about, namely, their own value system that tells us what to do, how we have to do it, what and how we should think about it and what type of values should be attributed to it. Economics tries to look like a value-free field of study and gives the impression that it does not contain any judgments or prejudices, but it seems to me that the opposite is true, economics creates our values.

Anyway, back to physics. This deals with abiotic objects, without free will; though even this is problematic in quantum physics, for example, one of the leading mathematicians and philosophers of the last century Alfred North Whitehead even assumed a kind of choice for small particles. Even in this characteristic the study of economy is special: its method is inspired by physics, but causal classical physics, not the most contemporary, which talks about the principles of uncertainty about the impossibility of precisely determining the speed and location of particles, etc. It is not only in mathematics, but also the various schools of mathematics which can be applied to objects under observation.

Models of models

And here is the key question on the spot, according to which models mode. After all, it is not just about creating a model, but also describing how such a model looks like. In other words, what is the mental spawn of such a model that seems objective and precise, which then subsequently grows and replicates. And this model, according to which the modeling economy models, is the method of classical physics.

But if we take the prism and method of science that deals with inanimate objects, and through these glasses we will look at the world of the living, we necessarily get a slightly different picture. If you will look at the people in this manner, you will get the impression of zombies. Via a mechanical model, an understanding of how the bones and meat are organized in order to move can be acquired, but I will never understand the why and the meaning of the whole object, a human. In other words, you will miss the specific and necessarily important dimension of man and society.

By applying the methods of physics we have the impression that the economy lacks some human dimension. At one time to look for the “new paradigm” was modern, something somewhat similar to the search for the Holy Grail. There was the impression that economics has no ethics, no values, that is inhuman, dead - and that there is the need to somehow credibly and objectively add a missing part, and only then will the economy give us a human sense.

Economic ethics

But that seems to me to be the essence of things: economics already has ethics of its own. Ethics is what tells us what to do. So no matter how we try not to influence economics by our value judgments, it will be done retrospectively. Economics tells us what to do; for example, to be effective in how to think ("think like an economist," which every textbook tries to teach), to determine and highlight certain values (total historically randomly chosen and assembled) i.e. variables type of GDP or inflation. Economics tells us in what we believe ethically (that a human is best approximated by egoism and utilitarianism) and what we may hope, for example in growth, which unknowingly solves everything and for whose coming our Western civilization has been "praying" for several years. And so on.

Economic ideology

Post-ideological period is the designation that some have given to the era in which we are currently living. The opposite is true, our time are the most ideological of times, probably ever. We have no distance from ideology; even do not know about it, which is reflected by the fact that we consider its only truth, without an option (even one merely fictional) to consider as an alternative ideology. The most substantial ideology of our time is just economics that look like non-ideological and value-free, as if neutral; that is why we are able to swallow it so easily without inhibitions or questions.  But, if you are listening just a little bit more attentively and try to look at economics from this angle, you will find out that what truly influences our policies lives in the fact that we do not know what we religiously believe in.

About the Author: Tomáš Sedláček (1977) is a Chief Macro-economic Strategist at ČSOB. He served as a non-political expert advisor to the First Deputy Prime Minister and Minister of Finance of the Czech Republic, with special responsibility over fiscal consolidation and the reform of the tax, pension, and healthcare systems. He also served as an economic advisor then-president of the Czech Republic, Václav Havel. (


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