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September 2009 posts

New book discussing Derek Parfit's new (but as yet unpublished) book

Mark D. White

New from Wiley-Blackwell, Essays on Derek Parfit's On What Matters, edited by Jussi Suikkanen and John Cottingham, reprinting a special issue of Ratio from earlier this year - the description follows:

In Essays on Derek Parfit's On What Matters, seven leading moral philosophers offer critical evaluations of the central ideas presented in a greatly anticipated new work by world-renowned moral philosopher Derek Parfit.
  • Presents critical assessments of what promises to be one of the key moral philosophy texts of our time
  • Features essays by a team of leading philosophers including Princeton's Michael Smith, one of the world's leading meta-ethicists
  • Addresses Parfit's central thesis - that the main ethical theories can agree on what matters - as well as his defense of moral realism

What is notable about this book is not that Parfit is being honored with it, but that the book being discussed has not yet been published; it is, however, available in PDF form here. (Ronald Dworkin's forthcoming opus, Justice for Hedgehogs, was recently the subject of a conference in Boston, featuring Amartya Sen, T.M. Scanlon, and other notables, but I'm sure that will be published soon.)

Journal Watch: Ethics, 119/4, July 2009

Mark D. White

This is the first in a series of posts highlighting new literature, especially from philosophy journals and books, that may be of interest in economists working with ethics but which may have flown under their radar.

The July 2009 issue of Ethics contains several articles which touch on ethics-and-economics discussion:

  • "What Good Is Commitment?" by Cheshire Calhoun questions the common assertion that commitment is always a good thing, and analyzes various types of commitment distinguished by their purposes and functions. (No reference is made to Amartya Sen's particular conception of commitment, but I think the discussion still applies to it, even if Calhoun's treatment of commitment is a bit broader.)
  • "Virtue Ethics and Deontic Constraints" by Mark LeBar attempts to explain how virtue theorists can recognize deontic constraints (such as "do not kill") while still retaining their traditional focus on the virtue (or viciousness) of the agent. (This is response to criticisms of virtue ethics which accuse it of basing moral judgment on the actor rather her act or the consequences thereof, but may seem inappropriate in cases of acts like wrongful killing.)
  • In "Equality of Autonomy," Daniel M. Hausman (co-author of Economic Analysis, Moral Philosophy and Public Policy) reviews Marc Fleurbaey's new book, Fairness, Responsibility, and Welfare, which he regards as an important contribution to the literature on egalitarianism, especially Ronald Dworkin's "luck egalitarianism" (as named by Elizabeth Anderson). (I'm teaching Dworkin's brand of egalitarianism soon in my class on Dworkin's philosophy, so I found this review of particular interest!)

By no means are these the only articles in this journal of possible interest to economics working in ethics, but they're the ones that popped out at me. Please let me know if you find others worth recommending.

I hope to continue this series of posts when new issues of other philosophy journals I follow come out (such as Utilitas), and also economics journals with emphasis on moral philosophy (such as Economics and Philosophy, and many of the other journals listed at the right). Again, any suggestions are most welcome!

Can rules and incentives alone fix the banks?

Jonathan B. Wight

What solutions do we have to make banks more secure?  There are three approaches, only two of which are getting serious attention.  First, lots of people want to change bank regulations, such as by raising reserve requirements.  Second, lots of economists want to change incentives, such as by tying management bonuses to long term performance rather than short run profits. 

But a third alternative that has received scant attention is to revitalize the professionalism of bankers.  That is, bankers were not always MBA-maximizers.  They were citizens who played an important role in the economic system, and like accountants, had professional obligations and duties. 

Last February Barry Schwartz gave an interesting talk at TED.  His thesis is that rules and incentives can only go so far, but when overused undermine the moral will for virtue.  That is, rules and incentives can actually corrupt the moral climate.  

Can more rules and better incentives solve the banking problem without renewed professionalism and virtue in bankers?  Schwartz says no.  See:  Barry Schwartz, “Our Loss of Wisdom,” TED Forum,



Virtue and the rightness of acts

Mark D. White

In an attempt to draw out our unheard-from member, I call your attention to a fascinating discussion from PEA Soup (linked to the right) titled Virtue Ethics and the Analysis of Right and Wrong Action, which confronts the classic problem: "Does the virtuous agent perform the action because it's right or is it right because the virtuous agent would do it."

“Universal Synthesis” Not Required

Jonathan B. Wight

Richard Reeves visited campus recently on the invitation of Sandra Peart.  Reeves is the author of a new biography, John Stuart Mill: Victorian Firebrand (London: Atlantic Books, 2007). 

One thesis Reeves advances is that Mill—after escaping from a force-fed intellectual youth directed by his father and Jeremy Bentham—moved away from utilitarianism.  Mill wrote of the cathartic experience of discovering 1) his emotions and 2) his intuitions.  Neither of these sits well with utilitarianism or neoclassical economics.

In his Autobiography, Mill recalls being startled by the following question and his own spontaneous answer:

Suppose that all your objects in life were realized; that all the changes in institutions and policies which you are looking forward to could be effected at this very instant: would this be a great joy and happiness to you?  And an irrepressible self-consciousness answered ‘No!’ (cited by Reeves, p. 62).

Consequentialist ethics (by itself) failed to provide meaning for Mill.  It fails to justify why any particular outcome (happiness, efficiency, and so on) should be selected.

I’m working on a book in which I argue likewise: it is foolish consistency to insist that we adopt only one ethical framework, whether consequentialism, deontology, or virtue ethics.  Milton Friedman, for example, relied on all three types of ethical arguments in analyzing the social responsibility of business (elaboration here). 

Ethical systems are interwoven; let’s learn when to use certain arguments for certain purposes.  Like John Stuart Mill, I would argue that “there is no necessity for a universal synthesis” (cited in Reeves, p. 110) –  at least until we are no longer complex social creates with histories, norms, and constructed meanings. 

Amartya Sen's new book [updated]

I'm ashamed to admit that this one snuck up on me: Amartya Sen's new book, The Idea of Justice, just out from Harvard. Here's the synopsis from the HUP site:

Social justice: an ideal, forever beyond our grasp; or one of many practical possibilities? More than a matter of intellectual discourse, the idea of justice plays a real role in how—and how well—people live. And in this book the distinguished scholar Amartya Sen offers a powerful critique of the theory of social justice that, in its grip on social and political thinking, has long left practical realities far behind.

The transcendental theory of justice, the subject of Sen’s analysis, flourished in the Enlightenment and has proponents among some of the most distinguished philosophers of our day; it is concerned with identifying perfectly just social arrangements, defining the nature of the perfectly just society. The approach Sen favors, on the other hand, focuses on the comparative judgments of what is “more” or “less” just, and on the comparative merits of the different societies that actually emerge from certain institutions and social interactions.

At the heart of Sen’s argument is a respect for reasoned differences in our understanding of what a “just society” really is. People of different persuasions—for example, utilitarians, economic egalitarians, labor right theorists, no­-nonsense libertarians—might each reasonably see a clear and straightforward resolution to questions of justice; and yet, these clear and straightforward resolutions would be completely different. In light of this, Sen argues for a comparative perspective on justice that can guide us in the choice between alternatives that we inevitably face.

There's a very long and detailed review from Herbert Gintis on the Amazon site (first link above), which is characteristically insightful and honest. The book arrived from Amazon last week, but I have no idea when I'll have a chance to read it.

If anyone has any comments on this book which is sure to be essential reading among "our set," please let us know!

UPDATE (Oct 6): I just discovered an online reading group dedicated to Sen's book at the Public Reason blog.

Ethics and Economics - a start

I had something ready to remark on when I got a chance and in the meantime started reading papers today for my class, Competition, Cooperation and Choice.  A statement appeared in a paper by a very good student:  "From the economic point of view [doing x] does not make any sense but still people do it all the time."  My strong sense is that if people do x (at least if many people do x or if one person repeatedly does x) doing x makes sense.  So economists may wish to think about how we teach our students to compartmentalize. Instead of telling them to put aside economics and think about how to explain the decision, can we teach our students that economic actors are a much richer set of individuals than we have acknowledged at least since the latter half of the 20th century?

Jonathan wrote that economic actors have ethical beliefs.  Economists sometimes acknowledge beliefs but haven't given adequate consideration to their motivational force.  If beliefs and ethical presuppositions motivate, then an economics that takes those into account may make a great deal of sense. This makes for a sort of Smithian analysis, the Smith of both TMS and WoN (the Smith without Das Adam Smith Problem) and it's what we hope to talk more about here. 

Greetings -- a brief opening to ethics and economics

Recently I gave a talk at Penn State on the need for ethics in economics.  It was a large and supportive audience, but one questioner asked, “Isn’t economics a science?  Why do you want to muck the waters of economics with all this normative stuff?”


It is a good question, and there are at least three types of answers:


(1) Economists already use ethics, in an unexamined form


(2) Economic actors have ethical beliefs and practices


(3) Critical thinking about public policy requires broad ethical understanding


The bottom line is that to do both positive and normative economics, practitioners and teachers should have an understanding of basic ethical theory.  Students should debate ethical theory as a way to understand the world and make better policy recommendations. 


Each topic is addressed below in greater detail.


(1) Economists already use ethics -- unexamined


Economics is already muddied with ethics, but most current day practitioners are unaware of where the boundary lines are.  Most are unaware that they do ethics every day. 


a) Efficiency.  For example, very few textbooks hone the point that “efficiency” is an ethical claim.  Efficiency starts by identifying the “best” goal for an economic system, using a consequentialist ethical framework.  There’s lots to unpack here, as Irene van Staveren (one of this blog’s founders) has done in many excellent papers and books.  See her article, for example, in the Handbook of Economics and Ethics (2009).


By treating efficiency as a technical subject only, economics teachers mistakenly perpetuate the notion that we have some scientific reason for claiming that the goals of an economy should be to maximize short run consumer and producer surpluses.  But we can’t derive an “ought” from an “is”.  Other goals lay claim and should be considered.


Personally, I think short run efficiency is a fairly weak moral justification for markets—and different goals (e.g., long run dynamic efficiency or long run freedom) can provide students with a better understanding of why markets might be useful or desirable.  This is certainly what Adam Smith thought.


b) Ethics and science.  There’s more here to the claim that economists use ethics all the time, even when they are unaware of it.  Sandra Peart (another founder of this blog) has called for researchers to sign ethical codes of conduct, e.g., in using econometrics. 


What does it say about “positive” economics that virtually no empirical studies, even in the top journals, can be replicated?  Doing economic research relies on judgments (some moral) and also on a set of moral norms (e.g., about Type I and Type II errors) and so on.  Most economists are doing ethics whether they admit it or not.  It would be great if we had a conversation about it.   Everyone should read Deirdre McCloskey’s justified rants on the subject, if only to provide a “dope slap”.


(2) Economic actors have ethical beliefs and practices


Economic actors—workers, managers, suppliers, entrepreneurs—have ethical beliefs and practices that diverge from the homo economic framework.  While it is easy to simply throw a “consideration for others” into a utility function, Amartya Sen and Adam Smith would both say something important gets lost by this approach.  Mark White (the key inspiration for this blog) has done much work on identifying the Kantian approach and its importance to economics.


With regard to my own interests, a lot of new work in moral psychology, evolutionary biology, and neuroeconomics suggests that the human brain does not operate entirely as the utility maximizing model suggests.  Hence, doing good positive economics can be enriched by knowledge of alternative ethical frameworks, like virtue ethics. 


Adam Smith is not only the founder of modern economics, he is the founder of behavioral economics.  The year 2009 is the 250th anniversary of Smith’s, Theory of Moral Sentiments, and the 150th anniversary of Darwin’s, Origin of the Species.  Darwin read Smith and was a proponent of his instinctual theories.


The connection between Smith and Darwin has been noted by many.  In particular, I argue here that the invisible hand should be understood as part of Smith’s theory of instincts. 


How is this important in the realm of business and markets?  Elsewhere I argue that while markets are modeled as being anonymous, in actual fact most of the “everyday” activities that people have with markets are up-front and personal. 


(3) Critical thinking about public policy requires a broad ethical understanding


Economic policy makers who examine only short run efficiency operate from a highly constrained choice set.  Efficiency is not the only important goal.  Other goals matter and other ethical approaches matter besides consequentialism (e.g., a regard for human rights).  Doing good normative economics may require economists to step outside their comfort zones. 


A Chronicle Review article here elaborates these points and provides some tips on getting started on putting some ethics in economics. 

Welcome to the Economics and Ethics blog!

Welcome to Economics and Ethics, a new group academic blog which we hope will allow us—and you, our readers and commenters—to:

  1. Showcase and discuss new work in ethics-and-economics by scholars around the world,
  2. Discuss ways to include treatments of ethics in economics education,
  3. Announce new projects and initiatives in ethics-and-economics, including calls for papers for books, journals, and conferences,
  4. Highlight the often ignored or overlooked ethical aspects of economic arguments, whether in the world of academia or policy, and
  5. Have a good time!

We all believe that economics without ethics—whether in terms of theory, practice, or education—is tragically incomplete. But we do not subscribe to any one “correct” way to integrate the two, substantively or methodologically—each of us has his or her favored approach on these issues, of course, but we value the discussion above all.

We will strive to maintain a civil, respectful forum where ideas can be discussed and debated without becoming personal, with respect to each other, fellow scholars, or political figures (especially political figures). We look forward to vibrant discussion of the ethical aspects of policy without resorting to name-calling and ad hominem attacks. If you disagree with a policy position being discussed, by all means say so, but please keep the discussion focused on the ideas, not the person, organization, or party behind them.

As with many group academic blogs, we have listed some of our books at the right, followed by some of our favorite blogs and websites (including associations and journals). Links to our personal websites are also there, if you want to get to know us a little bit—if not, I’m sure our respective personalities and idiosyncrasies will become apparent before long! We also hope to have guest bloggers from time to time, so if you’re interested in joining us for a spell, just let us know!

UPDATE (9-21-2009): I've added a page with helpful tips to those new to blogs, including how to comment on posts, as well as several ways to contribute original posts of your own (through contacting one of the main bloggers). Also, this post will be "pinned" to the top of the blog for a while, with new posts appearing below it, at least until the blog gets rolling, after which it will be moved to an "about this blog" page.