By Jonathan B. Wight
Several weeks ago the American Economic Association issued an ethics report and a Draft Code of Professional conduct. They asked for public comments. Here are mine:
There is disconnect between how economists typically model “other” people’s behaviors and how the authors of the Draft Code model the ideal behaviors expected of economists. The Draft Code of Conduct appeals to deontological ethics, insisting that professionals have a duty to act in certain ways toward others. Good outcomes “demand honesty and transparency in conducting and presenting research, disinterested assessment of ideas, and disclosure of conflicts of interest” (AEA 2018). These duty obligations apply even when web posting or reviewing papers anonymously.
By contrast, the typical economic agent is said to be a selfish maximizer who is opportunistically interested in personal outcomes. The ethical economist must act quite differently—actions now constrained by duty-bound rules even if they yield an inferior set of outcomes to self. Duty ethics and outcome ethics approaches can clash.
Frank Knight, one of the founders of the Chicago School, described the cultural milieu of ideal economics research as being akin to a “religion.” New PhDs must adopt an implicit duty-ethic like a monk adopts the habit of self-denial: “Now scientific enquiry has, and rests upon, a moral code, or in sheer fact a “religion”; and it is supremely important that scientists recognize this fact…. The basic tenet of scientific research—truth or objectivity—is essentially a moral principle, in opposition to any form of self-interest” (1947: 244).
Amartya Sen likewise notes that moral commitment “drives a wedge between personal choice and personal welfare” (1977: 329). It does not work to try to cram “moral commitment” or duty into a utility function because deontological ethics explicitly repudiates the idea that outcomes could or should determine right action.
The story gets more complicated. If economists are expected to do their duties, they must demonstrate self-control (virtuous habits). Thus, the creators of the Draft Code are also appealing to the development of virtuous character (as discussed in Adam Smith’s Theory of Moral Sentiments and at length by Deirdre McCloskey’s works). Without self-control, obligations and duties are meaningless. The principles set out in the Draft Code are deliberately “parsimonious,” ostensibly because the authors are hoping to rely on the virtues of individuals to translate the vague and incomplete language into habits of character.
To recap, economists use outcome-based modeling (often drawing upon selfish individualism) for predicting the behavior of those in other sectors of the economy. But in the Draft Code they propose a very different ethical framework for economics researchers, based on duty-based obligations; they also rely on virtue ethics for the development of the character habits of self-control needed to carry out the duties. Virtue ethics leads to duty ethics, which leads to ethical outcomes.
This framework of ethical pluralism suggests ideas for moving forward. What is called for is not an unenforceable Code, but the active encouragement of dialogue to get economists to understand the complex role of ethics within a market system, including the market for economic research. Instead of modeling people only as outcome-based maximizers, economists need to widen their ethical lenses to explore duty- and virtue-based ethical models.
I would propose a series of Ethics in Economics workshops (day-long) that could be held before ASSA or during the summer, varying locations around the country. I have done a number of such workshops, demonstrating how standard economics fits into a wider moral framework. The Templeton Foundation provided over $600,000 for curriculum development and workshops on this topic at the high school level. They (or other funding sources) may be amenable to doing something similar at the university level, especially if given the imprimatur of the AEA.
Knight, Frank. 1947. Freedom and Reform. New York: Harper and Brothers.
Sen, Amartya K. 1977. “Rational Fools: A Critique of the Behavioral Foundations of Economic Theory.” Philosophy and Public Affairs 6(4) Summer: 317–344.