prudence

Prudence, by Luca Giordano

Prudence (Lat. prudentia, contracted from providentia, seeing ahead) is the ability to govern and discipline oneself by the use of reason.^[1] It is classically considered to be a virtue, and in particular one of the four Cardinal virtues (which are, with the three theological virtues, part of the seven virtues).

The word comes from Old French prudence (14th century), from Latin prudentia (foresight, sagacity). It is often associated with wisdom, insight, and knowledge. In this case, the virtue is the ability to judge between virtuous and vicious actions, not only in a general sense, but with regard to appropriate actions at a given time and place. Although prudence itself does not perform any actions, and is concerned solely with knowledge, all virtues had to be regulated by it. Distinguishing when acts are courageous, as opposed to reckless or cowardly, for instance, is an act of prudence, and for this reason it is classified as a cardinal (pivotal) virtue.

Although prudence would be applied to any such judgment, the more difficult tasks, which distinguish a person as prudent, are those in which various goods have to be weighed against each other, as when a person is determining what would be best to give charitable donations, or how to punish a child so as to prevent repeating an offense.

In modern English, however, the word has become increasingly synonymous with cautiousness. In this sense, prudence names a reluctance to take risks, which remains a virtue with respect to unnecessary risks, but when unreasonably extended (i.e. over-cautiousness), can become the vice of cowardice.

In the Nicomachean Ethics, Aristotle gives a lengthy account of the virtue phronesis (Greek: ϕρονησιϛ), which has traditionally been translated as "prudence", although this has become increasingly problematic as the word has fallen out of common usage. More recently ϕρονησιϛ has been translated by such terms as "practical wisdom", "practical judgment," or "rational choice."

Prudence as the "Father" of all virtues

Allegory of Prudence on of the tomb of Francis II, Duke of Brittany The female face depicts Francis' daughter Anne of Brittany.

Prudence was considered by the ancient Greeks and later on by Christian philosophers, most notably Thomas Aquinas, as the cause, measure and form of all virtues. It is considered to be the auriga virtutum or the charioteer of the virtues.

It is the cause in the sense that the virtues, which are defined to be the “perfected ability” of man as a spiritual person (spiritual personhood in the classical western understanding means having intelligence and free will), achieve their "perfection" only when they are founded upon prudence, that is to say upon the perfected ability to make right decisions. For instance, a person can live temperance when he has acquired the habit of deciding correctly the actions to take in response to his instinctual cravings.

Prudence is considered the measure of moral virtues since it provides a model of ethically good actions. "The work of art is true and real by its correspondence with the pattern of its prototype in the mind of the artist. In similar fashion, the free activity of man is good by its correspondence with the pattern of prudence." (Josef Pieper) For instance, a stock broker using his experience and all the data available to him decides that it is beneficial to sell stock A at 2PM tomorrow and buy stock B today. The content of the decision (e.g., the stock, amount, time and means) is the product of an act of prudence, while the actual carrying out of the decision may involve other virtues like fortitude (doing it in spite of fear of failure) and justice (doing his job well out of justice to his company and his family). The actual act’s “goodness” is measured against that original decision made through prudence.^[2]

In Greek and Scholastic philosophy, "form" is the specific characteristic of a thing that makes it what it is. With this language, prudence confers upon other virtues the form of its inner essence; that is, its specific character as a virtue. For instance, not all acts of telling the truth are considered good, considered as done with the virtue of honesty. What makes telling the truth a virtue is whether it is done with prudence. Telling a competitor the professional secrets of your company is not prudent and therefore not considered good and virtuous.

Prudence versus cunning and false prudence

In the Christian understanding, the difference between prudence and cunning lies in the intent with which the decision of the context of an action is made. The Christian understanding of the world includes the existence of God, the natural law and moral implications of human actions. In this context, prudence is different from cunning in that it takes into account the supernatural good. For instance, the decision of persecuted Christians to be martyred rather than deny their faith is considered prudent. Pretending to deny their faith could be considered prudent from the point of view of a non-believer.

Judgments using reasons for evil ends or using evil means are considered to be made through “cunning” and “false prudence” and not through prudence.

Integral Parts of Prudence

"Integral parts" of virtues, in Scholastic philosophy, are the elements that must be present for any complete or perfect act of the virtue. The following are the integral parts of prudence:

• Memoria — Accurate memory; that is, memory that is true to reality
• Intelligentia — Understanding of first principles
• Docilitas — The kind of open-mindedness that recognizes the true variety of things and situations to be experienced, and does not cage itself in any presumption of deceptive knowledge; the ability to make use of the experience and authority of others to make prudent decisions
• Shrewdness or quick-wittedness (solertia) — sizing up a situation on one's own quickly
• Discursive reasoning (ratio) — research and compare alternative possibilities
• Foresight (providentia) — capacity to estimate whether a particular action will lead to the realization of our goal
• Circumspection — ability to take all relevant circumstances into account
• Caution — risk mitigation

Prudential judgments

In ethics, a "prudential judgment" is one where the circumstances must be weighed to determine the correct action. Generally, it applies to situations where two people could weigh the circumstances differently and ethically come to different conclusions.

For instance, in Just War theory, the government of a nation must weigh whether the harms they suffer are more than the harms that would be produced by their going to war against another nation that is harming them; the decision whether to go to war is therefore a prudential judgment.

In another case, a patient who has a terminal illness with no conventional treatment may hear of an experimental treatment. To decide whether to take it would require weighing on one hand, the cost, time, possible lack of benefit, and possible pain, disability, and hastened death, and on the other hand, the possible benefit and the benefit to others of what could be learned from his case.

Prudence in economics

Economists say that a consumer is 'prudent' if he or she saves more when faced with riskier future income. This additional saving is called precautionary saving. Prudence is closely related to risk aversion. The difference is that saying a consumer is risk averse merely implies that he or she dislikes facing risk, whereas prudence implies that the consumer takes action to offset the effects of the risk (namely, by increasing saving).

If a risk averse consumer has a utility function over consumption x, and if is differentiable, then the consumer is not prudent unless the third derivative of utility is positive, that is, .^[3]

The strength of the precautionary saving motive can be measured by absolute prudence, which is defined as . Similarly, relative prudence is defined as absolute prudence, multiplied by the level of consumption. These measures are closely related to the concepts of absolute and relative risk aversion developed by Kenneth Arrow and John W. Pratt.^[4]

Prudence in accounting

In accounting, prudence was long considered one of the fundamental accounting concepts, determining the time for revenue recognition.^[5] The rule of prudence meant that gains should not be anticipated unless their realisation was highly probable. However, recent developments in Generally Accepted Accounting Principles have led academic critics to accuse the international standard-setting body IASB of abandoning prudence.^[6] In the British reporting standard FRS 18, prudence, along with consistency, was relegated to a "desirable" quality of financial information rather than fundamental concept.^[7] Prudence was rejected for IFRS because it was seen as introducing bias to accounts, which should be neutral.^[8]

In a 2011 report on the late-2000s financial crisis, the British House of Lords bemoaned the demotion of prudence as a governing principle of accounting and audit. However, their comments were disputed by some leading practitioners.^[8]

See also

• Prudence (given name)
• Phronesis

References

External links

Look up Prudence or prudence in Wiktionary, the free dictionary.

• Summa Theologica "Second Part of the Second Part" See Questions 47-56
• Catholic Encyclopedia "Prudence"