Guest post by Laurent Dobuzinskis

Do markets foster cooperation and individual autonomy, or are they at best amoral, and at worst immoral? Does economic theory justify selfishness? Does the state have an obligation to promote the general welfare and to correct market failures, or are such efforts counterproductive? And how do economists address these questions? Do they speak with a distinctive voice in comparison to other scholars in the social sciences or the humanities?

Although there is an obvious risk here of overgeneralizing and of ignoring important nuances, examining these questions matters because a) economists are still considered to be the most reliable experts on what makes market work “efficiently,” and b) no viable and compelling alternative to a market economy has been fully worked out yet, in spite of a torrent of critiques of “neoliberalism.” But does this mean that the status quo, with which more and more people are increasingly dissatisfied, must be maintained? If not, what can be done, in both practical terms and in terms of generating innovative ideas that would be inspiring and yet pragmatic? And how do economists, on their own, or increasingly by engaging with a broader community of scholars and practitioners, contribute to this debate?

I provide an account of these debates in my two recently published books (Moral Discourse in the History of Economic Thought and Economic Growth and Inequality: The Economists' Dilemma). This account incidentally is, I hope, fair and balanced insofar as the (philosophically) pragmatic perspective to which I adhere implies that I am skeptical of overtly dogmatic positions. But, as I explain below, I do eventually come off the proverbial fence.

If one takes a very long view of the history of economic theory—as I do in Moral Discourse in the History of Economic Thought—the prominence of these fundamental normative questions has waxed and waned in economic theory. In more recent years, after a period of triumphalism for the neoclassical critics of “government failures,” which has come to as a result of the “Great Recession” and the pandemic, there are signs that a promising intellectual renewal is under way at the crossroads of economics, social psychology, and evolutionary biology.

The contours of this emerging paradigm are still fuzzy, but the “big idea” here is the displacement of the figure of the utility-maximizing homo economicus by a less self-regarding homo reciprocans (Bowles and Gintis 2002), motivated by a search for fair reciprocity. Altruism has not replaced selfishness in these new socio-economic approaches. But self-interest is being redefined as an “enlightened” form of self-interest in which the “self” is constituted by a plurality of mutually dependent interests. Conversely, the rationality of the maximization calculus gives way to a more open-ended reasoning which factors in changing circumstances and adjusting preferences. Fair reciprocity is the key to unraveling complex socio-economic dilemmas. The perceived lack of concern for this deeply seated expectation of fairness is arguably one of the main causes of the current rise of reactionary populism. But this concept can also inform a rethinking of political economy.

In a sense, this is a rediscovery of the concept of “sympathy” which was central to Adam Smith’s works and most classical political economists, including other Scottish Enlightenment thinkers, as well as some early French ans Italian pioneers of the discipline (such as Condillac and Genovesi, respectively). This is a profound insight that draws attention to the considerable extent to which most people care about others but also what others think of them—and this includes the political economists themselves whose theories who were not indifferent toward the human subjects of their analyses. Their advocacy of free markets was unmistakable, but it was tempered by this awareness and was conducive to a reformist/perfectionist approach. John Stuart Mill exemplified the latter; classical political economy, however, was displaced by modern scientific economics at the turn of the last century. Although many neoclassical economists were individually concerned with social problems, as Alfred Marshall certainly was, their methodological commitment to economic “efficiency”—that is, reaching an optimal equilibrium—meant that if there was a tension between “efficiency” and “equity,” they tended to err on the side of efficiency. Economic agents became lifeless automata following the instructions of a maximizing algorithm.

John Maynard Keynes challenged this perspective, but his moral intuitions were diluted in the mathematical models formulated by the architects of post-war Keynesianism. In any event, Keynesianism reached a dead-end in the 1970s. For several decades thereafter until the Great Recession of 2008-2010, neoclassical models reigned largely unopposed within mainstream economics. Of course, critical counteroffensives, mostly from outside of the discipline of economics, were launched by proponents of “social justice.” But their efforts have had relatively little impact on public policy, with the possible exception of environmental regulations. The neoclassical orthodoxy suffered a serious blow as a result of the Great Recession (followed in turn by the COVID-19 pandemic), when a new methodological pluralism came into effect. But within this (relatively) pluralistic context, behavioural/experimental models occupy a central place. They bring to light the complex ways in which people make decisions about their own welfare, sometimes creatively (often being guided by notion of fair reciprocity), and sometimes in naively “irrational” ways.

This paradigmatic shift at the empirical level opens up intriguing normative perspectives. If there is no good reason for limiting one’s horizon to self-interested motivations and narrowly “rational” calculations as the only “realistic” hypothesis for modeling socio-economic problems, it follows that there is no good reason for reformers not taking advantage of this quasi-natural disposition to act cooperatively. The policy instruments I emphasize in Growth and Economic Inequality follow from a shift from traditional redistributive programs to asset-based interventions (or predistribution). Injustices are not caused merely by the unfair distribution of incomes, but more fundamentally by an unfair allocation of capital resources (i.e., wealth). Predistribution would enable individuals and households to acquire capital and/or offer them opportunities to have some say about how capital is used by those who own most of it. Some examples include: a “stake-holder” grant (a lump-sum provided to young adults to invest as they wish) or a basic income guarantee; facilitating access to home ownership; and a generalization of the German codetermination system which empowers employees of large corporation by giving them seats on the boards of these corporations. The overall outcome would be what some Italian economists (such as Luigino Bruni) call a “civil economy.”

Wrapping up this post, I would like to draw a parallel between my intellectual journey and that of theorists such as Vernon Smith (Smith and Wilson 2019) and Deidre McCloskey (2021), who see recent developments as an invitation to revisit Smithian sympathy in an effort to “humanize” economics while remaining faithful to the core tenets of classical liberalism. But in my case, I’ve gone one step further by (tentatively) siding with the Italian civil economy tradition (Bruni 2006; Bruni and Zamagni 2016; Calvo 2018) which insists, albeit perhaps a little too naively (Martino and Müller 2018), on responsibilizing decision-makers and on mobilizing civil society in the development and implementation of predistributive initiatives.

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LAURENT DOBUZINSKIS teaches political Science at Simon Fraser University (Canada). His research interests include the history of political and economic ideas, the philosophy of social science (e.g., complexity theory), and public policy. Although leaning toward classical liberalism, his works reflect a preference for “nonideal theory” as a framework for achieving a pragmatic synthesis of complementary perspectives on civil society, markets, and political institutions. He is the author of The Self-Organizing Polity: An Epistemological Analysis of Political Life (1987), Moral Discourse in the History of Economic Thought (2022), and Economic Growth and Inequality: The Economists’ Dilemma (2023), as well as of articles and book chapters on an eclectic range of issues concerning practical and theoretical developments in political economy, from the role of think tanks to a basic income guarantee to the uses of game theory.

References

Bowles, Samuel and Herbert Gintis. 2002. “Homo Reciprocans.” Nature 155 (January): 125-128.

Bruni, Luigino. 2006. Civil Happiness: Economics and Human Flourishing in Historical Perspective. London: Routledge.

Bruni, Luigino and Stefano Zamagni. 2016. Civil Economy: Another Idea of the Market. Newcastle upon Tyne: Agenda Publishing.

Calvo, Patrick. 2018. The Cordial Economy: Ethics, Recognition and Reciprocity. Cham: Springer Nature.

Dobuzinskis, Laurent. 2022. Moral Discourse in the History of Economic Thought. London: Routledge.

Dobuzinskis, Laurent. 2023. Economic Growth and Inequality: The Economists' Dilemma. London: Routledge.

McCloskey, Deirdre N. 2021. Bettering Humanomics: A New, and Old, Approach to Economic Science. Chicago: University of Chicago Press.

Martino, Maria Guadalupe and Christian Müller. 2018. “Reciprocity in the Civil Economy: A Critical Assessment.” Journal for Markets and Ethics 6, No. 1: 63-74.

Smith, Vernon and Bart J. Wilson. 2019. Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century. Cambridge: Cambridge University Press.

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

Guest post by Yannis Papadopoulos

The re-establishment of ethics in economics—and more precisely in economic theory—is now more than eminent. It is promoted and supported by numerous philosophically intrigued economists. The claim has shifted from Wertfreiheit to teaching economics’ students the importance of moral philosophy in the development of economic theory, and how virtues and moral values do not limit the objective perception of economists by dragging them down a road of vague cogitation, but offer a more concrete understanding of human action. “What to do, then, for economics? Answer: raise ethical men and women, some of whom become economists. We are not doing so now in the education of economists.”* Yet this procedure, even though presented and understood as a leap forward and an escape from the strict mathematical and narrow-minded neoclassical economics method, could still be inadequate and one-dimensional. The question is what kind of ethics are students being taught?

There is not just one ethical theory. As economic theories have their differences, so do ethical theories. Utilitarian and outcome-based ethics are embedded in economic theory and have played a crucial role in the formation of neoclassical economics. If utilitarianism and consequentialism are the only ethical theories that should play a role in economic theory, then we should rest assured that ethics never left and therefore there is no need for their re-establishment in economic theory. Thus, the argument is not to re-establish ethics in economics, since ethical values never left the discussion. The argument is to introduce other ethical theories in economics, which have not participated so far. Utilitarianism and outcome-based ethics can be found not only in neoclassical economics, but in some branches of heterodox economics as well. Kantian and rule-based ethics, however, have been limited to discussions concerning trade and transnational agreements and some policy making processes. Virtue ethics are nowhere to be found.

Students are not in need of introductory lectures that praise the importance of ethics in economics and present ethics only form the utilitarian point of view. Students can easily apprehend the utilitarian logic behind works of great classical and neoclassical economists without being taught the importance of utilitarian ethics. Economics’ students should be given the opportunity to connect economics with a variety of ethical theories. That could lead to a generation of open-minded and ethically-integrated economists and humans in general. By pretending to reexamine economics through ethics, yet being interested only in the utilitarian perspective of ethical values, the course is definite and parallel if not the same as the one economics have followed so far.

* Deirdre McCloskey, "Conclusion: Raising Up Private Max U," in Wilfred Dolfsma and Ioana Negru (eds), The Ethical Formation of Economists (London: Routledge, 2018), pp. 164-183, at p. 177. (Preprint here.)

Yannis Papadopoulos was born in Athens in 1993 and studied European and International Relations at Panteion University in Athens. He received his Master’s degree in Political Economy from King’s College London. At the moment, he is in the final year of his doctoral thesis entitled “The Ethics of Efficiency and the Efficiency of Ethics” at Panteion University, for which he has received a scholarship from the Hellenic Foundation for Research and Innovation (H.F.R.I).

Email: [email protected]

By Mark D. White

In case you missed it, there was a fantastic interview with Deirdre McCloskey—another of my main influences, as well as a longtime friend—conducted by Paolo Silvestri in the Spring 2021 issue of Erasmus Journal of Philosophy and Economics. Their discussion is wide-ranging and insightful, covering much of McCloskey's writing over the years, but a significant focus is on her book Bettering Humanomics: A New, and Old, Approach to Economic Science, released earlier this year by the University of Chicago Press.

In solidarity with Vernon Smith and Bart Wilson (including their recent book Humanomics), and all of them drawing ultimately on Adam Smith, McCloskey argues for a richer economics—"quantifiably serious, philosophically serious, historically serious, and ethically serious," as she writes in the preface to the book—that recognizes the subject of economics as human beings, not mathematical abstracts, which only gets us so far (and reasonable people can quibble about exactly how far that is).

McCloskey takes particular aim at behaviorism and positivism, "both top-down, infantilizing, as in nudging, and industrial planning, and other anti-liberalisms. And both are indefensible philosophically. And both are poor guides to understanding the economy" (p. 202 of the interview). For more on these points, see the discussion between her and Silvestri in the Journal of Institutional Economics (open access), which focuses more on her forthcoming book Beyond Behaviorism, Positivism, and Neo-Institutionalism in Economics (also from Chicago).

Mark D. White

In this morning's Wall Street Journal, James Bovard pokes a little fun at the US government's plans for measuring gross domesic happiness (of which Nicolas Sarkozy was a leading advocate), pointing to how well they currently measure the myriad economic statistics regarding things that aren't entirely subjective. Many economists take this very seriously, however; as it happens, I'm currently working on several projects that, to some extent, deal with this issue (as is Deirdre McCloskey, if I remember correctly). The literature is recent but already vast: a marvelous summary and critique can be found in Daniel Hausman's 2010 Economics and Philosophy article, "Hedonism and Welfare Economics."

My take, in a nutshell, is that measuring happiness is neither feasible nor desirable. It is not feasible because happiness is irreconciliably multifaceted (along several dimensions) and inescapably subjective. It is not desirable because any official focus on happiness violates ideals of liberal neutrality and personal autonomy regarding persons' individual pursuit of the "good life," and the measurement of such can only lead to excessive government manipulation (if not paternalism) towards that imposed end (as Bovard describes). Rather, institutions should be established and maintained to ensure that person have the maximal capacity to make choices in pursuit of their own interests consistent with all others doing the same. Only such a system can ensure respect for persons' own interests and the choices they make towards them.

Mark D. White

This weekend's Wall Street Journal featured an article by Helen Sword entitled "Yes, Even Professors Can Write Stylishly," in which she criticized the quality of writing by most academics--and praised the exceptions, explaining some features that make good academic writing shine. (More can be found in her book, Stylish Academic Writing.) Having done my share of both writing and editing for various audiences, as well as lots of reading and refereeing, Sword's article got me to thinking about the challenges of academic writing and the pursuit of style in it.

I would tend to think that scholars in the humanities (such as philosophy and law) have more latitude--and more responsibility--to write stylishly than those in the physical and social sciences. Scientific writing is often rigidly formatted (sometimes explicitly by journals): present the problem, explain the model, derive results (theoretically or empirically), and interpret the results. This should all be written well, of course, but I think style is of less concern when you're explaining a negative second derivative or a statistically significant coefficient.

I remember writing my early economics articles (in theoretical industrial organization), in which it seemed all I was doing in the middle 80% of the paper was bridging the gaps between equations. The only "real" writing came at the beginning and the end, the parentheses that held the "stuff"--but ironically, the parentheses were the only part most people would read, so I learned quickly that careful attention to them was crucial.

Writing in the humanities--a category in which I would include non-scientific economics--is less structured. This gives scholars more freedom to exercise their personal style, and at the same time provides less scaffolding under which to hide bad writing. Naturally, philosophers and legal scholars, who are trained at crafting arguments, often have the most polished prose, but many economists excel at this as well.

Personally, I find much more stylistic freedom writing books (or contributions for edited volumes) than journal articles. While I agree with Sword that journal editors (and referees) value clear writing as much as anybody, I don't know if I'd agree that they appreciate stylish writing. Maybe it's just me, but I feel constrained to write very formally when I write for a journal; based on what I read in journals, it seems that is what most journal editors expect. (I say "most," because I know some journal editors that are exceptional in this way.)

I tend to be a fairly good mimic when I write, so I've been able to adopt my writing style to whatever venue I'm writing for, whether it be journal, newspaper op-ed, popular magazine, academic book or popular trade. Out of those, the journal "style" is definitely my least favorite, and happily I'm at a stage in my career where I'm no longer dependant on journal publications for professional advancement. But while books may reach a wider audience (especially outside academia), there is a degree to which regular journal publications help keep your name in the thick of things in a particular academic community, so in that sense I miss writing for journals. (It's just not as enjoyable--and shouldn't writing be enjoyable?)

Mimckry does not always pay off, though. For instance, Deirdre McCloskey is my favorite academic writer as far as style is concerned. I adore her tone--playful and gracious, yet firm and forceful--and I have to be very careful not to indulge my inner mimic and churn out third-rate McCloskeyisms when I write!

I make no claims to any significant degree of craft or style in my writing, academic or popular. I am very grateful when friends or colleagues read my work and say they can "hear my voice" in it, and I am especially happy when they say this in reference to my academic writing, in which it is more challenging to be myself. (My natural voice comes out much more easily in my chapters in the Blackwell Philosopy and Pop Culture books and my Psychology Today posts.) Whatever academic style I have is most apparent in Kantian Ethics and Economics: Autonomy, Dignity, and Character, especially in the introduction (available here). I'll just keeping trying to improve and hone my style as I keep writing. (And writing. And writing. And...)

Jonathan B. Wight

Via Mark White comes this link to a New York Times blog post by Gary Gutting, a professor of philosophy at Notre Dame. Gutting attempts to get inside the Republican candidates' debates and argues that a clearer and more careful understanding comes from seeing things from "inside" their world view. Here are some excerpts:

We could greatly improve the quality of our political debates if we simply held to the philosophers' rule of understanding and charitably formulating our opponents' views.

In particular, there is a basic tension between the two main elements of the conservative view: Christian ethical values and the free enterprise system. Christian morality is a matter of love for others and self-sacrifice on their behalf. A market economy assumes that all agents (employers, workers, buyers, sellers) act in their own selfish interests. The problem is evident in the New Testament's unease with the wealthy and sympathy for the poor; see, for example, Matthew 13: 22, Mark 10: 23-25 and James 5: 1-3.

The standard response to this sort of moral objection is that the "invisible hand" of the market produces public goods out of private selfishness. If we all act for our own selfish ends, there will be far more material goods for us to share than there would be otherwise. But this is a utilitarian argument; that is, one that judges actions as moral because they increase our material happiness. Christian morality, however, denies that moral good and evil depend on what maximizes such happiness. Christian love and self-sacrifice, in particular, are moral goods in their own right, regardless of their consequences.

Mark White rightly flags the second paragraph. First, Gutting makes the sort of mistake that Ronald Coase identified: science has no goals, only people have goals. Hence, the market economy itself makes no assumptions about agents, only people do. And it was a standard practice of economists to make such assumptions about selfish agents in the 20^th century. But today such a view is largely obsolete. Anyone who has been reading Amartya Sen and Vernon Smith, or even anything written about Adam Smith, is by now aware that the old standard view is simply wrong.

Most markets—the ones that you and I frequent every day—do not operate in reality on the "greed is good" philosophy. To do so would be to alienate most customers. Yes, the butcher and the brewer and the baker want their lucre, but they acquire it within the context of a moral understanding—in which their self-interest is held in check by self-control and by genuine and natural feelings of benevolence and justice. Adam Smith, when writing about the invisible hand, explicitly noted that the "character" of the trader in a market was critically important to the operation of the invisible hand. For elaboration, see here.

Deirdre McCloskey has beautifully told this story in The Bourgeois Virtues: Ethics for an Age of Commerce (2006). Paul Heyne also provided a lovely short analysis in "Moral Criticisms of Markets," The Senior Economist 10(4): April 1995 (link not available). My own academic novel, Saving Adam Smith, traces Adam Smith's views on the role of virtues in the marketplace and shows its relevance for business operations, even seemingly cut-throat computer chip businesses in Silicon Valley. There's plenty to read on this subject.

The bottom line is that markets and virtuousness (in the Christian sense) are entirely compatible. The most exciting development for the 21^st century is the rise of social entrepreneurs, who use the vehicle of a company and the institution of a market to lift people out of poverty and solve a myriad of problems. The motives can be many, and do not necessarily have to do with maximizing material consumption (think of all the entrepreneurs working to solve global warming or those solving local problems of survival by giving poor people access to markets). Profit is a necessary part of greasing the machine and making it sustainable over time. In a healthy competitive situation, profit is held in check.

No one would deny that the system breaks down sometimes, and there are many who use markets who are decidedly non-Christian in their pursuit of greed. But as McCloskey and Heyne make so clear, the motive of greed is operative under communism and all other systems as well—it is part of human nature. Nothing is perfect. But a competitive market is often the most transparent and easy way to deal with sociopaths like Bernie Madoff. That is not so say regulations are not needed. Even Adam Smith desired regulations in the financial sector to protect small savers.

So, while trying to get inside the world view of Republican candidates, Gutting does a service by calling attention to the need for understanding. But it is possible today to entirely rewrite his last two paragraphs using a more realistic science and philosophy of economics. I think his thesis still stands, crafted in a different way: The caricature of a market held by some Christians is that agents operate on the basis of greed and this caricature is indeed in opposition to Christian values. Much work remains to be done to overcome the ideological legacy of Scrooge and the "greed is good" image of entrepreneurs. Thanks to Gutting for bringing this to our attention.

Mark D. White

Our dear friend Deirdre McCloskey is featured in today's Cultural Conversation in the Wall Street Journal, which briskly covers some of her background, laments the separation of ethics and economics after the latter became intensely mathematical, and covers key points from her recent books, The Bourgeois Virtues: Ethics for an Age of Commerce and Bourgeois Dignity: Why Economics Can't Explain the Modern World.

Jonathan B. Wight

I've been reading Ronald Coase's, Essays on Economics and Economists (Chicago: University of Chicago Press, 1994) and finding it a delightful collection. In these articles, Coase displays the virtuous attributes that Frank Knight insists are needed in a serious scholar: integrity, competence, and humility, and one should also add--courage. Getting inside Coase's mind is easy because of his clear and uncluttered writing style. He is quick to point out the weaknesses in his own knowledge and argument, which is refreshing.

In one of the first essays, "How Should Economists Choose?" Coase takes on Milton Friedman's essay on "The Methodology of Positive Economics," and argues that Friedman's account of evaluating models based on their predictions is essentially a normative judgment about how economists ought to proceed:

When Friedman says that the "ultimate goal of a positive science is the development of a "theory" or "hypothesis" that yields valid and meaningful... predictions about phenomenon not yet observed," I cannot help mentioning that a science has no goals, only individuals have goals. (P. 18, emphasis added).

While Friedman's normative goal for science is prediction, Coase argues that in actuality, economists choose the models they endorse in an entirely different way based on whether a model makes more sense intuitively:

Economists, or at any rate enough of them, do not wait to discover whether a theory's predictions are accurate before making up their minds. Given that this is so, what part does testing a theory's predictions play in economics? First of all, it very often plays either no part or a very minor part." (p. 24)

Furthermore, empirical testing is rarely conclusive. Coase observes that "... if you torture the data enough, nature will always confess." (p. 27). On a related point, economists are in a competitive situation. Their research is done to bolster the theory that they already believe in. Hence, "what we are dealing with is a competitive process in which purveyors of the various theories attempt to sell their wares." (p. 28). (This chapter was first published in 1982, and thus presages Deirdre McCloskey's work on rhetoric.)

If scientists are self-interested, and work in a competitive market, will the invisible hand work according to the maxim "Greed is good?" Coase doesn't address this directly, but there are enough hints here to strongly infer an answer. Coase quotes Frank Knight, who argues that the "basic principle of science -- truth or objectivity -- is essentially a moral principle, in opposition to any form of self-interest."

And yet, economists have their own self-interests at stake, which include not only money, but perhaps even more important, status. Coase quotes Samuelson as writing: "In the long run, the economic scholar works for the only coin worth having -- our own applause." (p. 31)

This market for ideas would not work as well unless individual researchers adopted moral principles that constrain self-interest. Coase again cites Knight: "[T]he presuppositions of objectivity are integrity, competence and humility." (p. 15) In other words, science needs virtue.

Mark D. White

Last night I read a wonderful and concise article by Jillian Craigie (King's College London) from the latest issue of Bioethics (25/6, July 2011) titled "Competence, Practical Rationality and What a Patient Values." The abstract follows:

Craigie argues for assessing the procedure--in this case, practical judgment--by which a person comesto the decision whether to refuse treatment, rather than applying external standards to the decision itself or the reasons that led to it. She emphasizes that in the past, simply exhibiting a behavior and expressing a preference that was characterized as or associated with a mental disorder was taken as evidence that the patient was "irrational." In the case of anorexia nervosa (on which she focuses in the article), if the patient expressed an overwhelming desire to be thin, this was judged to be irrational simply because that was one of the hallmarks of the disorder. Craigie correctly identifies this as circular reasoning, akin to listing homosexuality as a disorder and then "concluding" that homosexual desires are "pathological" (or interpreting denial of a problem as evidence of the problem--for one of the most disturbing instances of this that I've read, see Deirdre McCloskey's Crossing: A Memoir).

Instead, Craigie recommends looking into the quality of the reasoning by which the patient forms the value or preference that leads to the treatment refusal. She considers several approaches of evaluating the process by which the patient comes to a particular conclusion rather than simply judging the decision itself, or the value or preference that led to it. I was gratified to see this approach, because that is what I argue in much of my work on paternalism and welfarism: assuming that paternalism is justified in cases of involuntary behavior, involuntariness must be assessed procedurally--based on how the individual came to "act" in a certain way--rather than judging the value, prudence, or wisdom of the act itself. Whatever external evalutors think of an action is irrelevant--all that matters is how she came to that decision, and if she acted voluntarily.

Craigie argues that there is some evidence--though perhaps not enough at this point--to suggest that anorexics form their overwhelming desires for thinness in ways that compromise their true autonomy, and compares this case to Jehovah's Witness who refuses blood transfusions, in which case she recognizes that the religious value leading to that decision may be a core value of the individual, and is therefore less questionable. This is in line with what I have argued elsewhere (including chapter 5 of Kantian Ethics and Economics), we should assume that individuals make decisions in their own interests, as complex and multifaceted as they are, and interference with them is only justified if there is evidence that a decision (or action) was not made (or taken) voluntarily. (And yes, I realize that voluntariness is a topic of discussion all in itself, but I think the point stands even without specifying it further.) Refusal of medical treatment is  fantastic application of this, and I am very happy Craigie raised these issues.