The beginning of economic science as an autonomous discipline is usually located in 1776, with the publication of Adam Smith's mythical work on the nature and causes of the wealth of the Nations. Other authors go back to Richard Cantillon and others even wait for Marshall to begin to distinguish the educational features of the Economy. What is undoubted is that, starting from the second half of the 18th century the social influence of contributions from specialists of this branch of knowledge was extending, and intensifying in an exponential way.

First there are some sporadic intellectuals who notice these aspects of reality and make them a high-priority. The perspective opened up by these pioneers extends to others and, soon after, Economics begins to be taught (and also different managerial knowledge) in a formal and institutional way, but subsidiary to other studies and teachings. Later on it ends up institutionalising the unitary and independent teaching of the profession of economist and manager. At the same time, its members organise themselves in numerous more and more influential professional associations. The new economic press, the euphoria of growth and the social fascination for financial economic knowledge as a means of triumphing in professional life open up a period of growing prestige with its outcome yet to be shaped.

The beginnings of that economic and managerial "big-bang" take place in an intellectual climate that, especially in the areas of moral law and philosophy, from where modern economic thought arises, can be classified as rationalistic law naturalism. For the rationalistic philosophy there is a supreme rule of Law, but this rule does not depend on fixed natural principles, but on the opportune and progressive appreciation and determination of human reason and the corresponding acceptance by the also human will. An entire series of thought currents converges on considering that reason and human will as the only sources of the Law. It is necessary to mention, amongst this amalgam of modern philosophical movements, the social contractualism of the cultured French and of Hobbes, as well as legal historicism, positivism, Kant's relativism or Hegel's absolutism.

That intellectual climate which has its origins located in the Dutch Hugo Grocio's legal rationalism, breaks with an age-old tradition in which the sources of morality and doing-good are first found in Natural Law and secondly in positive Law (but always subordinated by the former). In fact, the Romans had already recognized the existence of some legal rules observed by all the people, which they designated as "ius gentium." Those rules are above the determinations of reason and everybody must accept them. The Christian philosophy thoroughly developed the philosophical concept of Natural Law and showed its Christian roots formulating its highest negotiation demands with complete dignity of the human person.

There is no doubt that, throughout these two centuries of economic thought, all those rationalistic and positivist tendencies - that Hayek classified as constructivist rationalism - have prevailed about the acceptance of the existence of a certain "Natural Economy" that was above the difficult terrains of reason of some and others. When ignoring the validity of Natural Law (and of Natural Economy we can add) above the State and the individual, the conflict between the State that tries to enlarge its sphere of action and those individuals that seek to conserve that of their autonomy, is transferred to the economic field. When those objective approaches of demarcation of responsibilities are ignored, open opposition appears between the positive legal classification, which the State makes use of in its own interests, and the subjective laws of individuals.

Also, under the idea of positivism that only considers the Law formed by men as existent, subjective laws are denied any existence of their own and are independent from the effective juridical classification. In the same way that it is important to recover the statement of existence, faced with the Law created by the Laws of the State, of peoples' subjective laws that are recognized by Natural Law, it is also necessary to think of some general principles of Natural Economy that would be above concrete macroeconomic and micro-economic decisions.

Gazing at the cultural streams of the last twenty-five centuries, we have to recognize that our western economy, like almost all the great European works, has its roots in the productiveness of Greek thought and in the strength and practical unfolding of Roman law. While in Greece the philosophers looked for a solution to speculative problems, the Romans thought about practical and concrete problems such as the organization of the army, the administration of the counties, the construction of roads, etc. For all that certain knowledge of what we call today "management" was necessary. While the best Greek science is philosophy (and with it ethics and politics), the best of Rome is jurisprudence. It seems logical, all told, that one of the most important contributions of Rome, in short of Cicero, to the history of thought, is his formulation of Natural Law. Cicero takes from the stoic ones the idea of the existence of a divine Reason as an ultimate explanation of the order that we find in Nature. All men participate in that reason and because of that they are able to find this order and discover that it also extends to human behaviour. This Reason, as soon as it orders the adjustment of our behaviour to the natural order, transforms this into a law, which is Natural Law.

It is important to insist, (together with the impossibility of reaching it completely), on the existence of a Natural, perfect, ideal but at the same time real Economy. The rich and deep platonic myth of the cavern is applicable at this point. Men, immobilized only looking towards the bottom of the cave, can only see the shadow of all that passes outside and that is reflected in the interior. In that way they end up believing that the shadows are the true reality while the voices that they hear belong to shams of authenticity.

It is true that the subjective individual is only a shadow of that full and luminous reality; but it is also necessary to affirm that this exists although we cannot know it completely. Science cannot remain in the scepticism of opinion, nor raise that which is only subjective to the category of objective. The scientific task consists, once the existence of that light is affirmed, of illuminating those shadows to make them resemble more and more the realities that generate them.

When economic and managerial thought creates directive models for investigation, it is following, with more or less proximity, in the footsteps of Plato. The model is the ideal, utopian city that the economist, the manager or the politician carry inside them and that is the ultimate root of the principles of value that direct its whole performance. That subjective interior city has to be transformed by means of reflection, experience and scientific contemplation to adapt it to the natural objective city.

The application of the myth of the cavern to the relationship between the subjective and the objective in the economy should be supplemented with the Aristotelian explanation with the object of not falling into the extreme duality between the world of ideas and the world of realities. It also has to be varied to bring us closer to the important empiric component of the Economy. Aristotle's realistic vision could not accept that the world of our experience was not real and that the reality was in a world of ideas separate from this world in which we live. The real being is here; our experience does not deal with shades of reality. Rather it is our eyes that suffer many times from depth in perception and capture a cloudy reality in their subjectivity. The investigating task consists of eliminating those selfsame mists and tuning in with the multi-variant wealth of the objective. Not creating, but discovering it.

Relativism and positivism, underlying under the identification of the true with the majority opinion, make the recognition of the existence of that Natural Economy more necessary. The victory of democracies and the greater and greater importance in public opinion of economic questions when valuing the ruler's administration and worth, accelerates the politicisation of the economy and incites the appearance of a legion of economic quibblers that do not teach authentic science, but only the techniques of pleasing the people manipulating their feelings, like one who learns the art of handling a beast manipulating its instincts. Another negative consequence of this trend consists of the retreat from public life and politics by the authentic cultivators of economic science. Those that meditate on the great principles with more firmness and depth are razed by the new sophist uproar centred on the economic electoral opportunity of "anything goes" if in the end I achieve my interests. The continuous and hidden effort to discover sparks from those masterly lines of economic activity is seemingly suffocated by considerations that eliminate any ethical possibility.

After this last historical period of intense activity of action and reflection in the economic field, it is not difficult to extract some generally recognised principles. The presence of acquisitive desire and the search for more comfort among men was guided in the past towards wars and conquests with simplistic reasoning of zero sum. What one side won, the other lost. The moderate economy has discovered the market's capacity for harmony and the authentic attainment of that desire for prosperity without resorting to war, but through synergies generated by voluntary exchanges in the framework of a complex specialization and division of work that is empowered in an atmosphere of respect to personal freedom and private ownership. Those synergies empower economic phenomena in a positive way where all the participants end up coming out on top with regard to the previous situation.

Personal freedom, as an essential characteristic of the human being, makes ownership, voluntary exchange and specialisation possible and, as a consequence of all that, the convenience of service capacity to other people's patrimonies, physical as well as human. Ownership of a varied group of goods on which a right of free and exclusive disposition is exercised, lays the foundations for unity of those physical and human patrimonies favouring vertical and horizontal complementariness of the different goods between each other and regarding human purposes. The existence, recognition and legal protection of private ownership make free exchange possible between patrimonies that are constituted in decisive mechanisms of increment of values in use of all the economic factors that intervene in those transactions. In turn, the division of work and specialization become possible due to the existence of exchange. Specialization facilitates technological and economic innovations, at the same time also contributing to improve human capital, provided that division of work is compensated by an additional tendency towards mutually influenced unity.

Lastly, in a modern economy, with high specialization in all fields and a high degree of national and international commercial exchanges, adaptation to the subjective purposes of potential clients gives rise, in consequence, to the easier attainment of one's own purposes. If in my economic performance I give priority to the selfish search for my own preferences, my patrimony is devaluated. We can say then that the "invisible hand" consists of discovering that my interest is favoured as an effect of the search for other peoples' interests.

It is important to indicate lastly that to revalue the concept of Natural Economy it is necessary to try to eliminate what the practice of authors and the most common perception identify with a monolithic vision of complete doctrine that is underlying in the idea of Natural Law and that we can well classify as absolutely false. Economic theory is not the theory of a certain completed type of society. It becomes necessary to insist, as Rubio de Urquía indicates that "an analytic prolific theory of a special type of historical process is possible in which the operation of a universal legality and human freedom act organically in the production of the historical "reality."

Joseph John Franch Menéu
Paper presented in the 2nd Interdisciplinary Colloquy of Economic and Managerial Ethics.
IESE, Barcelona. 22nd/23rd October 1992