Mark D. White

Our readers may be interested to know about a new book coming out soon from Oxford University Press that I co-edited with Jennifer A. Baker entitled Economics and the Virtues: Building a New Moral Foundation. From the blurb:

While ethics has been an integral part of economics since the days of Adam Smith (if not Aristotle), many modern economists dismiss ethical concerns in favor of increasing formal mathematical and computational methods. But recent financial crises in the real world have reignited discussions of the importance of ethics to economics, including growing calls for a new approach to incorporating moral philosophy in economic theory, practice, and policy. Ironically, it is the ethics of virtue advocated by Aristotle and Adam Smith that may lead to the most promising way to developing an economics that emphasizes the virtues, character, and judgment of the agents it models.

In Economics and the Virtues, editors Jennifer A. Baker and Mark D. White have brought together fifteen leading scholars in economics and philosophy to offer fresh perspectives on integrating virtue into economics. The first section covers five major thinkers and schools in the virtue tradition, tracing historical connections and suggesting new areas of cooperation. The second section applies the ethics of virtue to modern economic theory, delving into its current practices and methodology to suggest areas for integration with moral philosophy. Finally, the third section addresses specific topics such as markets, profits, and justice in the context of virtue and vice, offering valuable applications of virtue to economics.

With insights that are novel as well as rooted in time-tested ethical thought, Economics and the Virtues will be of interest to economists, philosophers, and other scholars in the social sciences and humanities, as well as professionals and policymakers in the fields of economics and finance, and makes an invaluable contribution to the ongoing discussion over the role of ethics in economics.

Many if not all of the contributors will be familiar names: besides me and Jennifer, they include Christian U. Becker, Tim O'Keefe, James Otteson, Michael Baurmann and Geoffrey Brennan, Eric Schliesser, Andrew Yuengert, Christine Swanton, David C. Rose, Seung (Ginny) Choi and Virgil Storr, and Jason Brennan. (You can see the complete table of contents at Amazon, OUP, or my personal blog.)

Personally, this book has been a dream of mine for a number of years, and working with Jennifer, Adam Swallow and (the late) Terry Vaughn at OUP, and all the contributors, made that dream a reality in every possible way.

Economics and the Virtues has already been reviewed by Adam Gurri at Sweet Talk, where he calls it "a valuable source of insight, especially for economists used to operating within only one framework." Will Wilkinson of the Niskanen Center and The Economist calls it "a fascinating volume" and "an indispensable collection for anyone interested in moral psychology, economic theory, or the morality of markets," and pre-eminent philosopher and Kant scholar Onora O'Neill calls it "a rich and rewarding collection" that "explores classical accounts of the virtues, and argues that they remain essential not only to character but to culture, including the culture of markets."

(You can also see Jennifer's and my post at OUPblog discussing "The Big Short" in relation to the theme of the book.)

Mark D. White

I'm happy to report that my friend Ricardo Crespo has published a new book with Routledge titled A Re-Assessment of Aristotle's Economic Thought. In conjunction with the book's publication, Routledge has posted an interview with Crespo, beginning with the following poignant question:

Why a re-assessment of Aristotle's economic thought today?

This is an interesting, exciting time for economics. On the one hand, standard economics has become increasingly sophisticated –current micro and macroeconomics bear little resemblance to their 1970s counterparts. Asymmetrical information; industrial organization; new developments in game theory, econometrics and uncertainty management; rational expectations, and dynamic stochastic general equilibrium are all revamping economics.

On the other hand, valuable inputs from other sciences are enriching economic approaches, like the contributions from psychology that have led to behavioral and happiness economics, or the influence of experimental sciences on experimental economics and of neurology on neuroeconomics, as well as the sociological and anthropological notions on identity, reciprocity, gift and institutions used in economic theory developments or the borrowings from ethics that paved the way for capability approaches. New ideas are booming, and it is very hard to anticipate what economics will look like in 20 years.

As new scenarios unfold, we urgently need to rely on philosophy, as its role resembles that of an orchestra director, coordinating all the instruments to produce a harmonious melody. In fact, the greatest economists all started off as philosophers. Adam Smith was a professor of moral philosophy at the University of Glasgow, and his close friend and colleague, philosopher David Hume, also wrote interesting essays on economics. The list of other outstanding ‘economist-philosophers’ notably includes John Stuart Mill, Karl Marx, Carl Menger, Frank Knight, Ludwig von Mises, John Maynard Keynes, Friedrich von Hayek, Joseph Schumpeter, Herbert Simon, Albert Hirschman, and Amartya Sen. These names are associated with very different positions, but we need a neutral, more panoramic philosophical view. My candidate to provide it is Aristotle.

Read the entire interview here, and if you read the book, please feel free to comment on it below.

Mark D. White

Thanks to the indispensable Heterodox Economics Newsletter (latest issue here), here are two recent book reviews that may interest our readers, both from the latest issue of the Erasmus Journal for Philosophy and Economics (6/1, Spring 2013). [In the interest of full disclosure I must note that I blurbed the first book and the second was published in my "Perspectives in Social Economics" series from Palgrave Macmillan.]

Economics as Applied Ethics: Value Judgements in Welfare Economics, by Wilfred Beckerman (Palgrave Macmillan, 2011), was reviewed by our own Jonathan B. Wight, who finds it "a well-written textbook geared to advanced undergraduate or graduate students of economics, many of whom are largely and regrettably innocent of the ethical problems inherent in conventional economic analysis." After a detailed critical breakdown by chapter, Wight concludes that:

Overall, this book is highly recommended. It covers the selected topics with depth and sensitivity. The writing is generally excellent, but there are occasions of repetition and unevenness, as if the chapters were compiled separately and merged later. A student reader who is not already familiar with basic ethical theories could benefit from a primer in some places. For example, the book discusses Amartya Sen’s theory of commitment, however it does not dig very deeply to explain or defend that notion, whether from a deontological or virtue ethics approach.

The book devotes a lot of attention to questions of equality and justice, particularly on the work of economist philosophers such as John Broome, Partha Dasgupta, Ian Little, and Amartya Sen. This is
appropriate, interesting, and relevant. However, the book does not appear to address research in experimental economics, biology, and psychology that might be relevant to some of these questions, such as the work in neuroeconomics by Paul Zak, experimental work by Vernon Smith, or recent philosophical work on virtue ethics by Deirdre McCloskey. This is the normal limitation of any text that strives to be concise, yet students should understand there is much more to ethics and economics than can be conveyed in this book.

Approximating Prudence: Aristotelian Practical Wisdom and Economic Models of Choice, by Andrew Yuengert (Palgrave Macmillan, 2012), was reviewed by Ricardo F. Crespo. According to Crespo, 

Yuengert shows in this book that economic modeling undertakes only a partial analysis of economic action, because it ‘puts away’ interesting features of its subject that deserve to be taken into account. He proposes adopting the Aristotelian account of human action—more specifically, of practical wisdom—as the benchmark against which to consider economic modeling. He maintains that “economics can learn much about its limits from Aristotle, who describes aspects of choice behavior that cannot be precisely modeled” (p. 3). Thus, the aim of the book is to determine what aspects of human behavior cannot be captured by the economists’ models.

After a careful analysis of the book's structure and arguments, Crespo concludes that it

provides the useful service of identifying the characteristics of human action that economic models cannot take into account. It is useful because it explains the challenge to positive economists of trying to incorporate these characteristics into their approach, and because it highlights the features that economists must consider in their normative work. The contribution of the book lies in its originality. Economics books are not usually about what economics cannot do.

Both the author and the reviewer are Aristotelian economists, and readers benefit greatly from Crespo's detailed analysis of Yuengert's use of concepts such as eudaimonia  and contingency (the latter is comparison to Knightian uncertainty). (See Crespo's Academia.edu page for his own work on Aristotle and economics.)

Mark D. White

The latest Royal Institute of Philosophy Supplement (70, 2012) examines a number of issues concerning human nature. From the editors' introduction:

The study of human nature has always been of central importance to philosophy. ... Questions such as ‘what is human nature?’, ‘is there such a thing as an exclusively human nature?’, ‘through what methods might we best discover more about our nature?’, and ‘to what extent are our actions and beliefs constrained by it?’ are of central importance not only to philosophy and science, but also to our general understanding of ourselves as people who belong to the human species.

The essays collected in this volume collectively address key issues and taboos surrounding the theme of human nature by bringing together philosophers working in a multitude of areas including the philosophy of cognitive science, evolutionary psychology, the philosophy of biology, psychoanalysis, ethics and moral psychology, developmental psychology, the philosophy of mind and action, the philosophy of psychology, the philosophy of religion, and the history of philosophy.

The  papers all looks fantastic, but because of my interests in both virtue ethics and evolutionary psychology (or biology), I found Rosalind Hursthouse's contribution, "Human Nature and Aristotelian Virtue Ethics," most intriguing:

Given that it relies on claims about human nature, has Aristotelian virtue ethics (henceforth AVE) been undermined by evolutionary biology? There are at least four objections which are offered in support of the claim that this is so, and I argue that they all fail. The first two (Part 1) maintain that contemporary AVE relies on a concept of human nature which evolutionary biology has undercut and I show this is not so. In Part 2, I try to make it clear that Foot's Aristotelian ethical naturalism, often construed as purporting to provide virtue ethics with a foundation, is not foundationalist and is not attempting to derive ethics from biology. In Part 3, I consider the other two objections. These do not make a misguided assumption about Aristotelian ethical naturalism's foundational aspirations, nor question AVE's use of the concept of human nature, but maintain that some of AVE's empirical assumptions about human nature may well be false, given the facts of our evolution. With respect to these, I argue that, as attempts to undermine AVE specifically, they fail, though they raise significant challenges to our ethical thought quite generally.

Mark D. White

In the New York Times, psychologist Barry Schwartz (author of The Paradox of Choice: Why More Is Less) warns us of "The Danger of Too Much Efficiency," in which he argues that, while efficiency is generally a good thing and enables increases in standards of living, more efficiency is not necessarily better. The first half of his piece is an excellent summary of the benefits of efficiency, which he illustrates using the concept of friction:

...firms compete to become more efficient, and we as consumers, along with Bain and its like, benefit from this competition.

What stands in the way of efficiency is friction. When automobile manufacturers struggle to squeeze as many miles per gallon as possible out of their car designs, friction is the enemy. Their aim is to design a vehicle that uses every ounce of fuel to move the car forward.

And so it is in the world of finance. As the historian Niall Ferguson reminds us in his book The Ascent of Money, hard as it is to imagine, people didn’t always have money. The invention of money went a long way toward reducing the friction, the inefficiency, in financial transactions. No longer did the farmer have to bring sacks of potatoes to the marketplace to trade for eggs and milk. Money was a medium of exchange that greatly reduced what some have called the financial coefficient of drag.

But Schwartz recognizes that increasing efficiency by reducing friction is not the only important concern to individuals or society. After summarizing the efficiency gains from securitizing mortgages and increased access to consumer credit, he turns to the downside:

All these examples tell us that increased efficiency is good, and that removing friction increases efficiency. But the financial crisis, along with the activities of the Occupy movement and the criticism being leveled at Mr. Romney, suggests that maybe there can be too much of a good thing. If loans weren’t securitized, bankers might have taken the time to assess the creditworthiness of each applicant. If homeowners had to apply for loans to improve their houses or buy new cars, instead of writing checks against home equity, they might have thought harder before making weighty financial commitments. If people actually had to go into a bank and stand in line to withdraw cash, they might spend a little less and save a little more. If credit card companies weren’t allowed to charge outrageous interest, perhaps not everyone with a pulse would be offered credit cards. And if people had to pay with cash, rather than plastic, they might keep their hands in their pockets just a little bit longer.

Rather than focus on his policy recommendations (with which I have much disagreement, as regular readers of this blog can easily imagine), I want to address his normative analysis of efficiency, which with I have much sympathy. I do think, however, that the particular way in which he criticies the emphasis of efficiency is strange, and obscures his greater point to some extent--a point with which, again, for the most part I agree.

Using the Aristotelian language he adopted in his more recent book (written with Kenneth Sharpe), Practical Wisdom, Schwartz recommends finding the "golden mean" of efficiency rather than simply purusing its maximum level. While I don't disagree with this in principle, I do think it is an odd way to put the problem, since it suggests that we can find the optimal level of efficiency without consideration of other values. If there is a golden mean of efficiency, the only way to find it is to determine how much efficiency is consistent with other values we want to promote (such as justice, dignity, and equality). This is really no different from the Aristotelian determination of the golden mean of characteristics like courage, in which the extremes of foolhardiness and cowardice offend other values and ends, as opposed to being internally inconsistent.

But I find the golden mean analysis to be misleading in a deeper sense when applied to efficiency. The reason we can't determine the optimal level of efficiency is because it is an empty value--it's a mean to an end, not an end in itself. And as such, it should be maximized in order to provide the means to pursue valuable ends, except insofar as it conflicts with those ends themselves. In other words, the pursuit of efficiency must be limited, but out of recognition that other values are more important, not that there is something inherently bad about a certain level of efficiency. The only "danger with too much efficiency" is that it implies that important values have been neglected in its name.

To a large extent, this all cashes out the same way; my disgreement with Schwartz on this issue is largely rhetorical rather than substantive. He emphasizes the excessive attention given to efficiency, and then recommends that it be frustrated (by increasing frictions through regulation) in order to correct the resulting problems. But as I said above, the issue is not an excessive focus on efficiency, but on neglect on other values which should temper it. It is as if we said that, if people neglect their families to spend time at the gym, then we should discourage gym use by raising membership fees or reducing hours of operation. But exercise--also a good thing in general, though it can be taken too far in many ways--is not the problem here. The neglect of family is the problem, and it is that neglect that should be addressed. In general, our focus should be placed directly on the neglected values (justice, equality, and so forth) rather indirectly on limiting the threat to them (too much efficiency).

Indeed, Schwartz does emphasize the importance of corrective norms, although he resorts to regulation to bolster them:

Perhaps we can use the criticism of Bain Capital as an opportunity to bring a little friction back into our lives. One way to do this is to use regulation to rekindle certain social norms that serve to slow us down. For example, if people thought about their homes less as investments and more as places to live, full of the friction of kids, dogs, friends, neighbors and community organizations attached, there might be less speculation with an eye toward house-flipping. And if companies thought of themselves, at least partly, as caretakers of their communities, they might look differently at streamlining their operations.

True, increased observance of these norms would increase friction and reduce efficiency, but that shouldn't be the goal--the goal should be increased observance of the norms themselves! Again, the result is the same, but I worry that focusing on efficiency as the "target variable" risks obscuring the more important issues behind it.

I think Schwartz would agree with me that, in the end, the best way to conceptualize of efficiency is as a means to an end, in which the values we hold individually and collectively are promoted by it at the same time that they temper its pursuit.

Mark D. White

One of my neighbors at The Literary Table (and occasional commenter on this blog) Patrick O'Donnell has a thought-provoking piece on moral education and the virtues, focusing on the role literature can play, particularly in providing moral exemplars, in his new post "Narrative Goodness" at the Table. Well worth a read!

Mark D. White

[UPDATED with the link to the actual podcast]

Two contributors to The Thief of Time: Philosophical Essays on Procrastination, Jennifer A. Baker and (co-editor) Chrisoula Andreou, will be featured on the national Peabody Award-winning radio show “To the Best of Our Knowledge” on January 23, 2011. Air times for the Public Radio International/Wisconsin Public Radio show vary by station, but a podcast is available here. Baker, in particular, will discuss whether procrastination is a vice in the virtue-theoretical sense of the term, as she does in her Thief of Time chapter. (See here for more details on the show.)

Mark D. White

As Jonathan noted previously, the philosophers' magazine (tpm) has been running a series of the top 50 Ideas of the 21st Century, and today's entry, #42, is "The Moral Psychology of War" by one of my favorite philosophers, Nancy Sherman, author of The Untold War: Inside the Hearts, Minds, and Souls of Our Soldiers, Stoic Warriors: The Ancient Philosophy behind the Military Mind, Making a Necessity of Virtue: Aristotle and Kant on Virtue, and The Fabric of Character: Aristotle's Theory of Virtue.

From the article:

Going to war inevitably turns policymakers and academics to philosophical justifications of war and its conduct. And so, unsurprisingly, there has been a renaissance over the past ten years in just war theory. But what we need moral clarity about is not just whether a war or its prosecution is justified, but how soldiers bear the moral weight of war. Soldiers go to war to fight external enemies, in Iraq and Afghanistan today, or in Europe and the Pacific in my father’s era. But most, at least the honest among them, fight inner wars as well. They wrestle with the guilt of luck and accident, and the uneasy burden of killing and leaving the killing behind. For some, what weighs heavy is the sense of betrayal that is part of the moral shadowland of wartime interrogation – of building intimate rapport with a detainee only to exploit it. For others, the moral burden comes with killing civilians, as part of the permissible, but no less wrenching collateral damage of war.

Jonathan B. Wight

Brad Hooker has an interesting post in The Philosopher’s Magazine on “Ideas of the Century,” focusing on Derek Parfit’s forthcoming book, On What Matters (Oxford University Press, 2011).  Hooker claims that:

The most widely discussed idea in moral philosophy to emerge in the last ten years is Derek Parfit’s conclusion that the best versions of three of the leading moral theories completely coincide in their implications.

 If so, this is partial justification for the view that moral theories are not conflicting, but rather complementary ways of understanding and guiding behavior.  In short, Parfit’s conclusion is that:

Rule-consequentialism is thus argued to be the upshot of the best forms of Kantian and contractualist ethics.

 Is rule consequentialism the version of consequentialism that Adam Smith would endorse?  Where would virtue ethics fit into this mix?  My own view is that in real life rule consequentialism evolves from society’s broad experimentation, not from a philosopher’s pen.  It takes social experiments to winnow out good from bad behaviors and to determine which rules are best.  In short, rule consequentialism is derived inductively rather than deductively. 

At the individual level people follow some rules but emotions give rise to impulses and individual deviations based on moral sentiments that produce new experiments.  Hence, the moral sentiments are essential for the evolution of rule consequentialism. Virtue is needed also to help people develop self control so as to follow the rules. 

Jonathan B. Wight

Prudence is a prim and prudish word that sometimes leads people to think of “selfish.”  But the spin I’ve come to learn about this is that prudence is the cultivation of a certain kind of virtue.  That virtue is to show a proper regard for your future self. 

We can only experience life here in this moment, at this instant.  That is Jonathan in the Present.  But in a year, there will be another me, Jonathan Year 1.  And there is another person later, Jonathan Year 2.  There is a whole village of future people—my body and my thoughts are a veritable village green – a commons!

In this light, prudence means showing proper regard for those other people in my future commons.  It means showing those people respect by the actions I take today. 

One key issue is whether we project love on them from the present.  I don’t yet know those future people, but I can practice the act of prayer—lifting up my thoughts and heart to them. 

So, in one sense it is not selfish to be prudent, it is showing proper consideration for the rights of my future selves inhabiting the commons of my body. 

I used this metaphor in class the other day and students got it, I think.  Compared to prudence, when students blow off class, binge drink, and have wild sex with multiple partners (sounds fun?), that is being selfish, because their present self is greedy and their futures selves will have to suffer for that.  One’s actions today produce external consequences for one’s other selves in the future.

From a Kantian perspective, it is ethical to treat others with dignity; why would that not apply to our future selves?