Prudence in Management and Economic Wisdom

In the international workshop “Virtues and Vices in Economics and Business” held at the Institute of Philosophy of Catholic University of Leuven in June 19-20, 2015 in Leuven, Belgium Laszlo Zsolnai presented a paper on Prudence in Management and Economic Wisdom.

He started with the definition of wisdom developed by psychologist Robert J. Sternberg as „the application of successful intelligence and creativity toward the common good through a balancing of intrapersonal, interpersonal, and extrapersonal interests over the short and long terms.” In the light of this definition the cost-benefit analysis and the net present value calculation of mainstream economics and business represent anti-wisdom. These methods neglect the common good, consider only monetary values, disregard non-market stakeholders and discount the future.

For achievening prudence and wisdom in economic and business affairs we need leaders who are committed to the common good and able to create multiple balances among intrapersonal, interpersonal, and extrapersonal interests over time. In this way prudence appears to be the art of holistic value creation.