Books

New book highlights Adam Smith's contributions to political theory

Adam smith reconsideredBy Mark D. White

A new book from Paul Sagar (King's College London), Adam Smith Reconsidered: History, Liberty, and the Foundations of Modern Politics, coming out in March 2022 from Princeton University Press, argues that Adam Smith should be understood as a pioneer in political theory as well as economics and moral philosophy (the PPE trifecta, so to speak). Furthermore, Sagar argues that this new focus significantly alters the way Smith's more widely acknowledged contributions should be understood.

From the publisher's website:

Adam Smith has long been recognized as the father of modern economics. More recently, scholars have emphasized his standing as a moral philosopher—one who was prepared to critique markets as well as to praise them. But Smith’s contributions to political theory are still underappreciated and relatively neglected. In this bold, revisionary book, Paul Sagar argues that not only have the fundamentals of Smith’s political thought been widely misunderstood, but that once we understand them correctly, our estimations of Smith as economist and as moral philosopher must radically change.

Rather than seeing Smith as either the prophet of the free market, or as a moralist who thought the dangers of commerce lay primarily in the corrupting effects of trade, Sagar shows why Smith is more thoroughly a political thinker who made major contributions to the history of political thought. Smith, Sagar argues, saw war, not commerce, as the engine of political change and he was centrally concerned with the political, not moral, dimensions of—and threats to—commercial societies. In this light, the true contours and power of Smith’s foundational contributions to western political thought emerge as never before.

Offering major reinterpretations of Smith’s political, moral, and economic ideas, Adam Smith Reconsidered seeks to revolutionize how he is understood. In doing so, it recovers Smith’s original way of doing political theory, one rooted in the importance of history and the necessity of maintaining a realist sensibility, and from which we still have much to learn.


Amartya Sen's first volume of memoirs, Home in the World

Sen home in the worldBy Mark D. White

I'm sure it will come as no surprise that Amartya Sen was my primary early influence in economics-and-ethics. His book On Ethics and Economics was tremendously influential to my thinking, and I always mention his discussion of commitment in his seminal "Rational Fools" paper whenever I discuss my own approach to Kantian economics. I have had only one point of contact with him, an encouraging message from him in 2000 (!) during my earliest venture in economics-and-ethics, but I hope to touch base with him again. (I have tried, to be sure!)

This week I became aware of the impending publication of Home in the World: A Memoir, covering the first thirty years of his life (1933-1963). As such, it covers "only" his formative years, but you can see in this review by Umang Poddar how his experiences in those first three decades, traveling widely and meeting prominent intellectuals from many fields, shaped much of his academic work and popular writing to follow.

Of particular interest to academics will be Sen's experience with graduate school, journal publication, and his first academic position, as he describes in an excerpt published several months ago. At the age of 22, he completed his dissertation for Cambridge after just one year, short of the required three. He secured permission to go to India for the remaining two years, where he was soon invited to launch and head a new economics department in Calcutta, designing the curriculum and teaching most of the classes at first (as many as 28 hours of teaching per week). He confirms what many of us working in education know: "I was learning so much from teaching that I felt convinced I could not really be sure of knowing a subject well until I had tried to teach it to others."

I'll finish this post with a quote from the excerpt that shows not only Sen's humility but also how things may have changed a bit since 1956 in academic publishing (although perhaps not for him!):

Sen excerpt


On Edward Glaeser, urban economics, and economics-and-ethics

GlaeserBy Mark D. White

I'll start this post with an admission of ignorance: I've long had a casual interest in urban economics, although I've never had the opportunity to give the literature the attention it deserves. Given its policy focus, however, there would seem to be ample room for alternative ethical approaches, especially regarding property rights as well as the nature of welfare or well-being in an intrinsically and intensively social context. Whether or to what extent this is been done, however, I have no idea.

Evidence that such considerations are being addressed by urban economists comes from a feature on Harvard economist Edward Glaeser and his evolving views on the roles of the market and the state in the "life" of cities. (The piece was prompted by Glaeser's latest book, Survival of the City: Living and Thriving in an Age of Isolation, co-authored with his Harvard colleague, health economist David Cutler.) Whatever one may think of Glaeser's shift from his early libertarianism to his more recent endorsement of government intervention, his concern with not only growth, income, and employment, but also health, poverty, and well-being, suggests the kind of ethically nuanced approach the topic needs.

I find this very encouraging, and I look forward to investigating his work, and that of other urban economics, more in the future. (I do have to wonder, still, if more traditionally academic work in urban economics, by Glaeser or others, incorporates the same broader approach. If anyone knows of work along these lines, I would be more than happy to showcase it here.)


New book: Jennifer A. Baker and Mark D. White (eds), Economics and the Virtues: Building a New Moral Foundation

Mark D. White

E&V coverOur 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.)


Do-Gooders

Jonathan B. Wight

Mark White calls attention to a Wall Street Journal review of Strangers Drowning: Grappling with Impossible Idealism, Drastic Choices, and the Overpowering Urge to Help (2015) by Larissa MacFarquhar.

What happens when people have an almost pathological urge to help others? The people described in this book undertake “extreme ethical commitments”—such as adopting 20 children, undertaking a dangerous political protest despite having a young son, and refusing to wash dishes because this takes time away from environmental activism.

This last example is  juvenile, and reminds me of the humorous claim made about Gandhi: “You will never know how much it costs us to keep that saint, that wonderful old man, in poverty!”

The implication is clear—the supposed saintly one who extols benevolence toward others often does not fulfill the most basic moral virtue of prudence—taking appropriate regard for one’s own life and responsibilities. One has a duty to oneself as well as to others.

A virtue ethicist would say we need balance. It is fine to be generous and altruistic toward others, but not if that makes you the ward of the state or a burden on others. Some of the people described in this book seem to lack that balance, and that would not be virtuous, regardless of the motive for helping or the focus on others.


New book: Law and Social Economics

LawSEMark D. White

Over at the Association for Social Economics Blog, I talk about my latest edited book, Law and Social Economics: Essays in Ethical Values for Theory, Practice, and Policy, drawn from papers presented at the Allied Social Science Associations (ASSA) and Law and Society Association (LSA) meetings. Below is the table of contents:

Part I: Foundations

Chapter 1: "Towards a Contractarian Theory of Law," Claire Finkelstein

Chapter 2: "Environmental Ethics, Economics, and Property Law," Steven McMullen and Daniel Molling

Chapter 3: "Individual Rights, Economic Transactions and Recognition: A Legal Approach to Social Economics," Stefano Solari

Chapter 4: "Institutionalist Method and Forensic Proof," Robert M. LaJeunesse

Chapter 5: "Retributivist Justice and Dignity: Finding a Role for Economics in Criminal Justice," Mark D. White

Part II: Applications

Chapter 6: "Female Genital Mutilation and the Law: A Qualitative Case Study," Regina Gemignani and Quentin Wodon

Chapter 7: "An Unexamined Oxymoron: Trust but Verify," David George

Chapter 8: "On the Question of Court Activism and Economic Interests in 19th Century Married Women’s Property Law," Daniel MacDonald

Chapter 9: "Divergent Outcomes of Land Rights Claims of Indigenous Peoples in the United States," Wayne Edwards

Chapter 10: "Punitive (and) Pain-and-Suffering Damages in Brazil," Osny da Silva Filho


Economics After the Crisis

Irene van Staveren

Irene bookA year after the fall of Lehman Brothers, The Economist's headline proclaimed the end of modern economics. What has happened since? Well... almost nothing.

Mainstream and near-mainstream economic textbooks still sell like before. And INET has supported some initiatives that eliminate the rough sides of neoclassical thought and neoliberal policy advice. Very laudable initiatives, with, for example, Wendy Carlin's work on developing a new undergraduate curriculum CORE. But students of economics are not satisfied with these minor changes, so many years after the start of the financial crisis. Their Rethink Economics petition demands more fundamental changes to textbooks.

As a supporter of every single petition, pamphlet, op-ed, and plea for pluralism in economics before and after the crisis, I decided three years ago that I should practice what I preach. The result is Economics after the Crisis, a pluralist introductory textbook published by Routledge in January 2015. It offers a tool to understand the basics of economics from four theoretical perspectives either for use in the classroom or for self-study alongside a standard course book. The theories are presented in every chapter, micro and macro. And from interdisciplinary and close to real-world experiences to mathematically in an idealized world of perfect markets and agents following the single ethical guide of utility maximization. The book presents social economics, institutional economics, post Keynesian economics, and neoclassical economics and thereby shows that almost no economic concept or tool is theory-neutral. If only this message gets across, the book will have accomplished already more than I could hope for.

The window of opportunity to reform economic teaching is almost shut. Banks pass stress tests in Europe and the US while still being too big to fail. Nobel Prizes are awarded to economists who show no effort at all in rethinking economics. And economic policies ignore the danger of continuously increasing private and public debt, while shifting the consequences of such myopia on disadvantaged groups and whole populations.

If it is not now, we may have to wait for the next crisis to change economic thinking and teaching. I truly hope that the combined efforts of critical economists, activist students, and courageous teachers will help to make the change. We cannot afford to standby any longer.


New book series: On Ethics and Economics (Rowman and Littlefield International)

Mark D. White

I'm pleased to announce a new book series I'm editing, On Ethics and Economics, with the good people at Rowman & Littlefield International:

On Ethics and Economics will explore the ethical aspects of topics traditionally studied through economics. Starting from the position that no economic issue should be examined in an ethical vacuum, books in the series will feature philosophers, economists and other scholars exploring ethics behind issues normally treated as primarily economic in nature. Titles will explore the implicit ethical assumptions made when discussing issues and propose alternative ethical foundations for them, as well as investigating ethical aspects of issues that are often neglected.

With Jonathan Wight on the advisory editorial board, it can't fail.

I also have a blog post at RLI, "Can Economics Operate in an Ethical Vacuum? Of Course Not,"explaining the motivation and focus of the series, along with some topics we hope to address in the near future. 

If you have any ideas for the series, please let me know at profmdwhite@hotmail.com.


There Is Little Happiness to Be Found in Happiness-Based Policy

Mark D. White

IllusionGovernments around the world are starting to measure happiness (or subjective well-being) with the goal of a more humane process of policymaking. According to supporters, happiness-based policy will focus governments’ attention on what really matters to their citizens, their essential well-being, better than economic measures such as gross domestic product or national income that are too far removed from the day-to-day concerns of the people.

While the intentions may be good, the benefits of happiness-based policy are illusory at best and counterproductive at worst. There are fundamental problems with defining and measuring happiness, as well as implementing policy based on it, that prevent it from being a viable alternative to traditional policymaking based on GDP and other economic statistics.

First, the term “happiness” is notoriously difficult to define. Philosophers have tried to do this for centuries, identifying and detailing many types of happiness but arriving at no universal definition. Songwriters, poets, and novelists have done a better job describing happiness in all of its nuance and glory, but this does not provide a solid basis for measurement. For the most part, psychologists and economists who try to measure happiness do not worry about definitions, satisfied that “everyone knows what is,” but with no guarantee that everyone knows it to the be the same thing. Happiness is simply too vague a concept to define precisely enough for measurement without excluding what many people consider happiness to be to them.

Second, there is no straightforward way to translate an essentially qualitative and subjective feeling such as happiness into quantitative data. Most happiness surveys consist of questions about the respondents’ current state of happiness or satisfaction with their lives, which they answer on a numerical scale with the units labeled “very unhappy” to “very happy” or “the least satisfied I can imagine” to “the most satisfied I can imagine.” Even if the definition of happiness were clear, these labels are not. For instance, how a person interprets these labels depends critically on the experiences and circumstances of his or her life. A wealthy and successful CEO may feel she has not lived up to her potential, while the janitor in her building may be very pleased with his lot in life. Human beings have the ability to adapt to their life circumstances, which explains why people living in deplorable conditions may nonetheless report high levels of happiness and well-being. This also implies that the steps on the happiness scale are inherently subjective, nonuniform, and incomparable, rendering them unable to support the mathematical processes researchers need to perform on them to provide information for policymakers.

Finally, even if there were no problems with definition or measurement, happiness-based policymaking raises numerous ethical and political issues when it comes to implementation. For example, would the government target a growth rate for happiness? This is problematic in light of the “hedonic treadmill,” by which we work hard to achieve more happiness, only to adapt to that level and strive for more. In the end, we work more and more and end up with little increase in happiness, and the same would likely hold for official happiness “stimulus.” Another concern is the possibility of significant inequality of happiness: due to adaptation, the underprivileged may report levels of happiness that mask their circumstances while the affluent express dissatisfaction and boredom. Would we then redistribute resources from the poor who seem happy to the rich who don’t? Finally, people often give up some happiness now in exchange for more later, such as when they go to school or on a diet. How would government measures focused on the now take account of investments in the future? All of these are questions that policymakers will be forced to struggle with if they choose to base policy on measures of happiness.

Given the inherently vague, qualitative, and subjective nature of happiness, it is impossible to define and measure it well enough for the purpose of policymaking. This is not a simple matter of refining statistical techniques; the problems with happiness measurement are more fundamental than that.

There is, however, a better way. Instead of trying to determine what happiness is and how to measure it, the government can trust individuals to make choices in pursuit of their own interests. Instead of trying to boost the happiness of those doing fairly well, the government can devote its resources to alleviating the suffering of the poor. Instead of targeting the general level of happiness based on arbitrary definitions and inaccurate measurement, the government can address specific problems that their citizens tell them need to be addressed.

In short, the government does not need to define, measure, and evaluate happiness in order to find problems to address. There are enough problems facing the country that are readily apparent. Liberals, conservatives, and libertarians may disagree about the scale and scope of what government should do, but I think they would all agree that the government should deal with the problems at hand rather than invent new ways to find them. In the end, that may be the best way to make people happy.


For more, see my latest book, The Illusion of Well-Being: Economic Policymaking Based on Respect and Responsiveness (pictured above), as well as a longer two-part treatment of the above at the LSE Politics and Policy blog (here and here).


Mehmet Cangul on an upside to a reduction in employment

Mark D. White

Mehmet bookMuch has been written recently regarding Obamacare's predicted effect on employment and, even more recently, on the CBO's report on the effect of increasing the minimum wage on same—see, for instance, Ross Douthat's latest column, "When Work Disappears." 

As it happens, I was fortunate enough to see an advance copy of Mehmet Cangul's upcoming book Toward a Future Beyond Employment, in which he argues that there can be an upside to a gradual reduction in employment, but that society needs be re-evaluate its ideas about work, consumption, and leisure in order for that to happen. (I have an older piece at Psychology Today along the same lines, so I was drawn to Mehmet's arguments.)

I asked Mehmet if he would write a short piece for Economics and Ethics addressing the recent Obamacare controversy, and he graciously agreed. Below is what he wrote:

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The recent Congressional Budget Office Report, revealing Obamacare would cause more than 2 million job losses, has caused much stir. Republicans have been quick to point out that they were right all along about Obamacare’s cost on jobs and business. But the White House defended the result, arguing that much of the job loss will come from people choosing not to work and instead focus on their “dreams.” Their reasoning is that healthcare subsidies for the lower ladder of the income scale would enable workers to “escape” jobs that they would otherwise stay in only to keep their healthcare coverage. Some on the right have been quick to ridicule this argument about expanded choice, framing it as a last-ditch political effort to make the best of an embarrassing revelation.

However, we should take a pause from politics and ask this intuitive question: does it make sense that people would continue to work at jobs they would rather quit just so they can have affordable healthcare? This is in fact a severe distortion that prevents the full realization of what the American economy has already inherently achieved, more choice.

This is one of the core ideas of the book I wrote, Toward a Future Beyond Employment, that will be published by Palgrave this April. My main argument is that the Western economies that have been able to incorporate their technological progress structurally to their economic production should be able to afford more free time for their workers. Due to certain economic inefficiencies and cultural biases, however, the system is not able to fully internalize this opportunity. If Obamacare will give workers more choice, and ultimately more time, this should be welcomed, not attacked on the basis of a dogmatic cling to political correctness about job loss.

Some have argued that a declining work force would pose problems for economic production as jobs would increasingly be harder to fill. However, the trend of technology and automation points otherwise. The more sophisticated and nuanced automation becomes, the faster we will converge toward a paradigm where the demand for human labor will become either irrelevant or severely reduced (in terms of both laborers and hours) even in areas where we would never imagine robots could toil on our behalf. Just as the technological shift of manufacturing eliminated jobs in physical production, a parallel structural shift is taking place in non-tangible jobs such as administration. Increasingly more sophisticated software technology is rendering mental labor less relevant as well.

Does this mean more people will be idle without a purpose? This is a caricature. In truth, it only means that society will have to translate the time savings from this labor elimination toward alternatives that give individuals more choice and creative satisfaction while certain industries and their potential for traditional job generation face a natural decline. The economy is no longer one of industrial and material production, but instead operates on the basis of the production of ideas and concepts. More time away from declining traditional work structures should naturally enable more people to contribute to the production of ideas on an individualized basis.

In my book I argue that this is the next stage of economic advancement that Western economies face, and will result in higher welfare based on people having more time to use as they wish. Public policy that accommodates this evolution by expanding choice should therefore be encouraged. While Obamacare will continue to be debated on multiple grounds, its impact on jobs has to be considered more thoughtfully beyond headline numbers and short-term political gain.