By Mark D. White

Courtesy of Klaus Mathis, I'm pleased to present the call for papers for the tenth Law and Economics Conference at the University of Lucerne in Switzerland (in collaboration with the University of Notre Dame Law School), from March 17-18, 2023. This year's theme is one near and dear to this blogger's heart: Law and Economics of Justice: Efficiency, Reciprocity, Meritocracy. I participated in the conference in 2015 (on nudging) and it was one of my favorite conference experiences ever—I highly recommend it.

The call elaborates on the three subtopics:

Efficiency: Traditionally, the economic analysis of law was guided by the goal of efficiency. Economists usually define efficiency as Pareto efficiency or Kaldor-Hicks efficiency. Any change that puts one member of society in a better position without making somebody else worse off is a Pareto improvement. A change is a Kaldor-Hicks improvement if the gainers value their gains more than the losers their losses, whereby only hypothetical compensation is required. Efficiency as a normative goal is heavily contested. In particular, many authors see an antagonism between efficiency and distributive justice, which they qualify as the greatest socioeconomic goal conflict. Other authors view efficiency not as a goal itself but rather as an instrument to achieve social goals. In any case, the economic analysis of law has to differ between two steps: the positive analysis and the evaluation of the results by normative criteria.

Reciprocity: Economists have traditionally based their models on the self-interest hypothesis of the homo oeconomicus. In this model, an individual maximizes his own utility without showing altruistic or jealous behaviour. Behavioural economics calls into question the theorem of self-interest. Many people do, in fact, stray away from exclusively self-interested behaviour. There are also signs that the consideration of fairness and mutual benefits are important to bilateral negotiations and the functioning of markets. For example, in the ultimatum game, two players have to agree on the division of a fixed sum of money, with one player proposing the division and the other accepting or rejecting the division and with that the money for both players. Empirical evidence shows that offers with only a small share of the available sum are considered unfair and therefore rejected.

Meritocracy: The concept of meritocracy refers to a system, organization or society in which people are chosen and moved into positions of success, power and influence on the basis of their abilities and merits. This means that through hard work, an individual is able to climb the social ladder. Moreover, meritocracy directs the most talented people into the most functionally important positions and thereby enhances a society’s efficiency. However, the equalizing function of meritocracy has been criticized. Rather than reducing inequality, meritocracy is seen as the cause of racial, economic, and social inequality.

Submissions take the form of a short (1-2 pages) description of the topic and a short CV, and should be sent to Klaus Mathis ([email protected]) by September 30, 2022. Papers will be chosen by October 15, and draft papers are due February 28, 2023. (A conference volume is planned, and final papers will be expected soon after the conference.)

Accommodations are provided for the speakers courtesy of the conference, but they are responsible for arranging their own travel. (I remember the train ride from Zurich to Lucerne well—such breathtaking scenery!)

For complete details, please see the call for papers PDF here.

Mark D. White

Out now from Cambridge University Press is a new book co-edited by Matthew Adler (Duke University) and Ole Norheim (University of Bergen) titled Prioritarianism in Practice. The abstract reads:

Prioritarianism is an ethical theory that gives extra weight to the well-being of the worse off. In contrast, dominant policy-evaluation methodologies, such as benefit-cost analysis, cost-effectiveness analysis, and utilitarianism, ignore or downplay issues of fair distribution. Based on a research group founded by the editors, this important book is the first to show how prioritarianism can be used to assess governmental policies and evaluate societal conditions. This book uses prioritarianism as a methodology to evaluate governmental policy across a variety of policy domains: taxation, health policy, risk regulation, education, climate policy, and the COVID-19 pandemic. It is also the first to demonstrate how prioritarianism improves on GDP as an indicator of a society's progress over time. Edited by two senior figures in the field with contributions from some of the world's leading economists, this volume bridges the gap from the theory of prioritarianism to its practical application.

The chapters are as follows:

1. "Introduction," Matthew D. Adler and Ole F. Norheim
2. "Theory of prioritarianism," Matthew D. Adler
3. "Well-being measurement," Matthew D. Adler and Koen Decancq
4. "Prioritarianism and optimal taxation," Matti Tuomala and Matthew Weinzierl
5. "Prioritarianism and measuring social progress," Koen Decancq and Eric Schokkaert
6. "Prioritarianism and health policy," Richard Cookson, Ole F. Norheim, and Ieva Skarda
7. "Prioritarianism and fatality risk regulation," James K. Hammitt and Nicolas Treich
8. "Prioritarianism and climate change," Maddalena Ferranna and Marc Fleurbaey
9. "Prioritarianism and education," Erwin Ooghe
10. "Empirical research on ethical preferences: How popular is prioritarianism?" Erik Schokkaert and Benoît Tarroux
11. "Prioritarianism and equality of opportunity," Paolo Brunori, Francisco H.G. Ferreira, and Vito Peragine
12. "Prioritarianism and the covid-19 pandemic," David E. Bloom, Maddalena Ferranna, and J. P. Sevilla.

By Mark D. White

Thanks to Christian Munthe, we have a fantastic announcement for postdocs in economic and environmental ethics at the University of Gothenburg. From the posting:

The University of Gothenburg tackles society’s challenges with diverse knowledge. 56 000 students and 6 600 employees make the university a large and inspiring place to work and study. Strong research and attractive study programmes attract scientists and students from around the world. With new knowledge and new perspectives, the University contributes to a better future.

The University of Gothenburg is looking to hire one or more 2-year post docs in the intersection of economic and environmental ethics. Economic ethics is the application of moral or political philosophy to critical issues in business organizations or the economic system. Environmental ethics is the application of moral or political philosophy to critical issues in the relationship between humans and non-human environmental systems. The research area should be understood broadly so as to include subtopics like business ethics, the political philosophy of financial markets, ethics of commodification, ethics of climate change, ethics of biodiversity, environmental philosophy and the philosophy of (environmental) economics. Any applications related to these subfields are welcome.

Potential research questions in these fields include the following:

• • What moral duties, if any, do commercial firms have to mitigate climate change?
  • Do consumers have a duty to invest in sustainable firms?
  • Is sustainability an irreducible moral value?
  • Can environmental values (such as biodiversity) be expressed in monetary terms?
  • Do advantaged nations have duties to promote sustainability in vulnerable nations?
  • Is the state justified in coercing financial markets towards sustainability?

The post doc will join the Financial Ethics Research Group which consists of philosophers and economists dedicated to ethical and political issues raised by the financial system (in the broadest sense). More specifically, the post doc will be connected to the research program Sustainable Finance Lab, which is a collaboration between several Swedish universities that is funded by Vinnova, Sweden’s innovation agency. Additional funding is due to the University of Gothenburg, the Knut and Alice Wallenberg Foundation, the Marcus and Amalia Wallenberg Foundation, and the Swedish Foundation for Strategic Environmental Research (Mistra).

More details are available here.

Guest post by Wilfred Dolfsma and Ioana Negru

Comes the next economic crisis, comes the next call for economics to become both more realistic and to be more ethical. While the two are related, in The Ethical Formation of Economists (Dolfsma and Negru 2019) we focus on the vexing issue of the way in which ethics and economics relate: Why is the call not answered?

Many, especially heterodox economists, blame economic theory: It does not have conceptual space for ethics. This is a call for ethics in economics (Figure 1). That, in some way, is correct, but in a strict sense it is not: Only one form of ethics is consistent with (mainstream) economics, and that is utilitarianism. The call for economics to make conceptual space for ethics is a call for (one of) the other two broad perspectives in ethics to be given a place: deontology and communitarian ethics. Most of discussions on ethics and its consequences in mainstream economics are situated within the area of welfare economics, despite the ethical implications of most economic theories endorsed by various groups of economists. There is indeed a need for more of an ethics of economics (Figure 1).

What motivates the call for (more) ethics in economics is the seemingly lack of interest among economists for the consequences of either the economic vagaries that men go through as consequences of economic crises, or even the consequences of the advice given about economic policies provided by economists. The conclusion drawn from this by many is that economics ducks its ethical responsibilities: There is an ethics of economics that is denied (by economists) (Figure 1). Yacintas (2020) argues that economists do not display sufficient attention to the fact that economic ethics is part of scientific ethics also and these principles should be part of economist’s methodology and epistemology, to inform how economists build knowledge.

Indeed, there is a small group of economists that looks at the ethical stance that economists take: distinctly utilitarian and dismissive of people’s deontological rights or the ethical norms that emerge and develop in a community. Does economic theory as taught at colleges make economists selfish (i.e., considering utilitarian arguments only), or are selfish individuals drawn into economics? Or both? (Cf. Frank et al 1993.)

What this discussion does not touch upon is what is the key contribution of this volume of contributions: How are economists actually formed, ethically? How does an ethics of economists take shape? This obviously happens in class, but also later in their careers, for instance when doing research or when informing the larger audience about findings (through media, with their own specific working [cf. McCarthy and Dolfsma 2014]).

A related question is whether economists can be trained ethically or if learning ethics can take place naturally and in an evolutionary and behavioural way, influenced by the life and career pathways economists have? This is an essential question: In our book, DeMartino (2019) argues that the postgraduate curriculum must contain modules on ethics in economics, and McCloskey (2019) states that the ethical behaviour starts early on, in the education of children and young people, that can then evolve later in their careers.  

For us, the essential issue is whether economists can be trained, at all levels (undergraduate, postgraduate and doctoral), in scientific ethical principles through various modules, such as courses on ethics in economics and economic policy-making, and also scientific ethics taught in courses in research methods. This will raise the awareness of thinking ethically when suggesting economic policies and the appropriate responsibility that comes with policy advice. Re-introducing courses of ethics in economics would be a progressive step towards training and forming ethical economists.

References:

Dolfsma, W., and I. Negru, eds. (2019) The Ethical Formation of Economists. London and New York: Routledge.

DeMartino, G. (2019) "Training the Ethical Economist," in W. Dolfsma and I. Negru (eds) The Ethical Formation of Economists. London and New York: Routledge, pp. 7-23.

Frank, R.H., T. Gilovich, and D.T. Regan (1993) “Does Studying Economics Inhibit Cooperation?” Journal of Economic Perspectives 7: 159-171.

McCarthy, K.J., and W. Dolfsma (2014) "Neutral Media? Evidence of Media Bias, and Its Economic Impact.” Review of Social Economy 72: 42-54.

McCloskey, D.N. (2019) "Conclusion: Raising Up Private Max U," in W. Dolfsma and I. Negru (eds) The Ethical Formation of Economists. London and New York: Routledge, pp. 164-183.

Yacintas, A. (2020) "Why Is Economics Not Part of a System of Scientific Ethics? A Review Essay on Wilfred Dolfsma and Ioana Negru’s The Ethical Formation of Economists." The Journal of Philosophical Economics: Reflections on Economic and Social Issues XIII(2): 202-214.

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Wilfred Dolfsma: Wageningen University, Netherlands

Ioana Negru: University Lucian Blaga of Sibiu, Faculty of Economic Sciences, Sibiu, Romania

By Mark D. White

The F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics (Mercatus Center, George Mason University) has announced an intriguing conference for next October. From the announcement:

The Markets & Society Conference aims to bring together scholars, students, and practitioners from various disciplines, ideological perspectives, and backgrounds who seek to advance inquiry, contestation, and research of consequence that are grounded in mainline political economy. This tradition posits that through emergent orders, formal and informal institutions, and the ability to learn from errors, humans can and often do find ways to live better together. Research in this tradition examines governance, resilience, and cooperation as well as the burdens, biases, and injustices that result from human interaction and institutions. Multiple disciplines, methods, and strategies are needed to examine the complexities of social life, ranging from analyzing the economic, political, and social consequences of institutions; understanding and reexamining history; assessing policies that attempt to stymie or encourage particular outcomes; and examining issues of morality and justice.

See the announcement for more details—the deadline for abstracts is March 1, 2022.

By Jonathan B. Wight

Conference Dates: October 21-22, 2021

Virtual Conference

LSBU Business School
&
London Centre for Business and Entrepreneurship Research

During the last 30 years, the conversation between economic theory and ethics has been restarted, after a period of interruption, generated by the positivist era in economics. We cannot ignore, in this revival, the role of the financial crisis, gender and racial inequality and now the divisions revealed by the unequal impacts of the pandemic. An important contribution has been the call for a professional economic ethics led by DeMartino (2011) and DeMartino and McCloskey (2016).

More recently, Dolfsma and Negru (2019) challenge the idea that ethics has no place in economics. Building on their ideas we ask: Is ethics important for the study of the economy and, if so, how should it be taught?

This two day conference will be of interest to lecturers and students in economics and business - and anyone with an interest in the future of the economics curriculum.

Link for the event & registration: 
https://www.eventbrite.co.uk/e/teaching-ethics-to-economists-challenges-benefits-tickets-170298187463 


Programme

Day One: Thursday 21 October

9.45am - Virtual housekeeping & Zoom functionality - Neil Hudson-Basing, Corporate Events Manager, LSBU

9.55am - Welcome - Craig Duckworth, LSBU Business School, UK

10am - Introduction to the day. Economics and Ethics - what is the agenda?

• Ioana Negru, Lucian Blaga University of Sibiu, Romania
• Imko Meyenberg, Anglia Ruskin University, Cambridge, UK
• Craig Duckworth, LSBU Business School, UK

10.30am - Revisiting the analytical relationship of Ethics and Economics - María Isabel Encinar & Félix-Fernando Muñoz, Universidad Autónoma de Madrid, Spain

11.15am - Theoretical and ethical reductionism and the neglect of subjectivity in economics and economic education - Giancarlo Ianulardo, University of Exeter, UK

12pm - Lunch break

12.30pm - Keeping alive non-individualistic ethics in political economy: a review of concepts from Aquinas to Habermas - Stefano Solari, University of Padua, Italy

1.15pm - Racism, the economy and ethics: where does it all begin? - Paolo Ramazzotti, University of Macerata, Italy

2pm - Teaching economic harm to economists - George DeMartino, University of Denver, USA

2.45pm - Comfort break

3pm - The fate of moral philosophy in the age of economic scientism: ethics and welfare economics in mainline economics - Peter Boettke, George Mason University, USA

3.45pm - Plenary: Reflections

4pm - End of Day One

______________________________________________________________________

Day Two: Friday 22 October

9.45am - Virtual housekeeping & Zoom functionality - Neil Hudson-Basing, Corporate Events Manager, LSBU

9.55am - Welcome and intro to Day Two - Craig Duckworth, LSBU Business School, UK

10am - Managerial decision making: consequences and Consequentialism - Malcolm Brady & Marta Rocchi, Dublin City University, Ireland

10.45am - Economic curricular, pluralism and the Global South - Michelle Groenewald, North- West University, South Africa

11.30am - Accounting as applied ethics: teaching a discipline - Wilfred Dolfsma, Wageningen University, Netherlands

12.15pm - Lunch break

12.45pm - Purusharthas: the human pursuit of wealth and welfare. The Indian approach to ethics and economics - V P Raghavan, Indira Gandhi National Centre for the Arts, India

1.30pm - Economics, ethics and deliberation

• Ioana Negru, Lucian Blaga University of Sibiu, Romania
• Imko Meyenberg, Anglia Ruskin University, Cambridge, UK
• Craig Duckworth, LSBU Business School, UK

2.15pm - The kidney market debate: a retrospective on Becker and Elias - Jonathan Wight, University of Richmond, USA

3pm - Comfort break

3.15pm - Alfred North Whitehead on the education of the commercial class: its influence on Keynes - Dennis Badeen, University of Hertfordshire, UK

4pm - Plenary: Reflections

4.15pm - End of Conference

*Times according to GMT

________________________________________________________________________________________________

This conference will be delivered virtually via Zoom. You will receive the joining instructions on the Monday before the event takes place.

By Jonathan B. Wight

UPDATE (8/17/14):  David Warsh retracted the harsh critique of Debreu that I quoted below.  Warsh now states that Debreu did not delay in sending a referee's report on McKenzie's paper. He did, however, not inform Arrow of the paper's proof.  For more, see economicprinciples.com.

David Warsh (“The Startling Story behind a Famous Footnote”) calls attention to an apparently shocking case of ethical misconduct uncovered by Till Düppe and Roy Weintraub. 

In Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit (2014), Düppe and Weintraub reveal that Gerard Debreu, while himself trying to write a paper on general equilibrium with Kenneth Arrow, had been the reviewer of a paper on that subject by Lionel McKenzie (photo). 

McKenzie presented and published first, but Debreu never communicated with Arrow about McKenzie’s work, and never cited McKenzie’s contributions.

Did Debreu steal a Nobel from McKenzie?  Warsh reports that:

Further details had emerged, including an astonishing fact:  the anonymous referee, who bottled up McKenzie’s submission to Econometrica for a critical time, while Arrow and Debreu tidied up their proof, was none other than Debreu himself; and Debreu hadn’t disclosed his conflict of interest to the editor, Robert Solow. Debreu’s conduct was thus revealed as having been dishonorable.

Is it possible Debreu’s conduct can be justified?  Did Debreu think McKenzie’s work was sufficiently different so as to not merit citation?  Did he think McKenzie’s work was of such poor quality that it did not merit citation?

One cannot cite everything that one reads and omissions may seem obvious with hindsight that are not at all obvious at the time.

Still, this reminds us why journals need to lay out and follow strict guidelines for conflict of interest and to promote virtue ethics through exemplars and role models. 

Mark D. White

I was very sad to hear of Professor Gary Becker's passing. Although I never met him, and heard him speak only once, he had a tremendous impact on my life and career.

As an undergraduate economics major in college, I was focusing on monetary economics and anticipating a career with the Federal Reserve -- I wasn't even thinking of graduate school at that point. And like many an economics geek, I would confuse amaze my friends by applying reasoning based on marginal benefit and cost to everything in their lives, advising them (for instance) to ignore the sunk costs of "everything they'd put into a relationship" and focus on whether they were likely to derive positive net benefit from it going forward.

Oh how they mocked me.

But then two things happened. One was the publication of Richard Posner's book Sex and Reason, which applied basic economic reasoning to a variety of sexual topics. The other was Gary Becker's being awarded the Nobel Prize and my subsequent introduction to his work on crime, discrimination, and the family.

Validation at last! Here were two brilliant scholars, at the top of their fields, applying economic reasoning to topics other than the traditional subject matter of undergraduate economics: interest rates, GDP, and widgets. I loved the internal logic of economics since my sixth-grade teacher Mr. Dalton drew a supply-and-demand diagram on the chalkboard, but I was bored by the topics to which it was normally applied in my college classes. And here were Becker and Posner, doing interesting things with economics -- dare I say, sexy things -- and being heralded for it!

Furthermore, they showed me that I could have an academic career studying these things using economics. So I forgot about Alan Greenspan's job and instead applied to graduate schools (which I would have had to do anyway, but I hadn't thought that far ahead yet). My eventual graduate program didn't focus on "Becker topics," so instead I took the full range of microeconomics courses to get the basic modeling techniques under my fingers. And while I wasn't working on marriage or crime as I progressed toward my PhD, I did always have them in the back of my mind -- and I would include these topics in the introductory economics courses I taught in graduate school and beyond.

By the time I addressed topics like marriage and the family in writing, it was as part of a critique of the ethical foundations of mainstream economics. The same topics that fascinated me and drew me into academic economics as an undergraduate later frustrated me because of the difficulty mainstream economics had dealing with their inherent normativity. People don't help their family members and obey the law simply because the expected payoff exceeds the expected cost -- there's often more to it than that, ethical factors that are not easily reducible to raw utility. Economics has a valuable perspective to offer on these issues, although it is neither complete nor dispositive.

But, I repeat, it is valuable. And for that value, anyone who studied topics such as crime, discrimination, and the family -- or economics in general -- owes Professor Becker a tremendous debt of gratitude. My personal debts go much deeper, of course: I thank him for showing me a new avenue for my curiosity and, indirectly, for inspiring my shift to philosophy to supplement the economic approach he helped to teach me. Rest in peace, sir.

Mark D. White

In an op-ed in today's The New York Times, Adam Grant, bestselling author of Give and Take: A Revolutionary Approach to Success (and fellow blogger at Psychology Today), examines the current tenure system in American universities and the skewed incentives they provide for continued work after tenure:

It's no secret that tenured professors cause problems in universities. Some choose to rest on their laurels, allowing their productivity to dwindle. Others develop tunnel vision about research, inflicting misery on students who suffer through their classes.

...

Instead of abolishing tenure, what if we restructured it? The heart of the problem is that we’ve combined two separate skill sets into a single job. We ask researchers to teach, and teachers to do research, even though these two capabilities have surprisingly little to do with each other.

Later in the piece he recommends three different kinds of tenure: research-only, teaching-only, and research-and-teaching, each tailored to a professor's talents and drives.

Some universities currently have similar positions: some have research professors, for instance, and most have some version of a lecturer. As far as I'm aware, however, the lecturer position, while it may carry some form of tenure, is rarely considered equivalent to professor positions, which demeans the devotion of one's time primarily to teaching. So Grant's proposal would certainly be an improvement over the status quo in this regard.

Having three types of tenure would allow for more delineation of job responsibilities, improve the targeting motivation (as Grant argues), and provide more precise guidance to committees charged with granting reappointment, tenure, and promotion. (As chair of my department I serve on such a committee at my college.)

Ideally, however, a scheme like this would not be necessary. Since evaluation occurs at the level of departmental and college-wide tenure-and-promotion committees, they can lead in reforming this process (with changes in motivation flowing down from there). They should allow for faculty to have different orientations regarding teaching, research, and service (the often-forgotten aspect of a professor's job). They should be willing to assess each faculty member according to his or her particular mix, as long as they remained "productive" in whatever way they chose to further the mission of the college or university. Fantastic instructors should be valued as much as prolific and acclaimed researchers, as well as active campus citizens and the faculty members who successfully combine two or even all three of these roles.

As I advocate for in my committee, all three roles are essential to a flourishing university but not every faculty member should be expected to excel in all. As economists know, there can be enormous benefits to specialization of labor, and I would like to think these benefits can be realized without creating additional bureaucracy and proliferation of tenure-tracks. While I agree with Grant's concerns, I would prefer to encourage plurality within the existing tenure system rather than making it more complicated. But this relies on those responsible for making personnel decisions to adopt this pluralistic mindset—and if they cant (or won't), then multiple tenure tracks may be the next best option.

(By the way, for a humorous look at this topic, see The Onion's recent post here.)

Jonathan B. Wight

My co-blogger Mark White questions the need for economics to be considered a science. 

Along similar grounds I will ask whether there are enough outstanding discoveries in economics to warrant a Nobel Prize every year?

The first Nobel in economics was awarded in 1968, technically today called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. 

Given that only living people can win the Nobel (which seems a crying shame), the first ten or twenty years had plenty of 20^th century breathing giants to celebrate—Samuelson, Friedman, Hayek, Arrow and others. 

I’m not saying we are now scraping the barrel.  Eugene Fama, Robert Shiller, and Lars Peter Hansen who won this year made great contributions.  But the contradictions between Fama and Shiller demonstrate how uncertain those contributions might be. 

John Kay notes that:

“Copernicus [Shiller] was right and Ptolemy [Fama] was wrong. There are not, and will not be, equivalent certainties in economics, and if such certainty is the hallmark of science – I do not think it is – then economics is not a science. The resulting insecurity seems to lead the Nobel committee to claim more for the subject of economics than it has achieved.”

I am waiting for the time the Nobel Committee announces that no one has won that year, out of respect for truth and humility for what we think we really know.