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.

Mark D. White

My stomach turns at the news that Uganda is set to pass a law that imposes life sentences and sometimes the death sentence for homosexual acts:

KAMPALA, Uganda (AP) — Uganda's anti-gay bill will be passed before the end of 2012 despite international criticism of the draft legislation, the speaker of the country's parliament said Monday, insisting it is what most Ugandans want.

Speaker Rebecca Kadaga told The Associated Press that the bill, which originally mandated death for some gay acts, will become law this year.

Ugandans "are demanding it," she said, reiterating a promise she made before a meeting on Friday of anti-gay activists who spoke of "the serious threat" posed by homosexuals to Uganda's children. Some Christian clerics at the meeting in the Ugandan capital, Kampala, asked the speaker to pass the law as "a Christmas gift."

This is John Stuart Mill's tyranny of the majority at its ugliest: a majority of citizens using the machinery of government to negate the rights of the minority.

Many Americans rejoiced at the success of same-sex marriage referenda in last Tuesday's election, and certainly there was tremendous cause for celebration. But why should gays and lesbians have had to wait for a majority of the electorate to "come around" and "grant" same-sex couples the same access to civil marriage that straight people have? Before this election all same-sex marriage referenda were voted down--a far cry from what Uganda is doing, to be sure, but the spirit is the same, a majority deciding what rights a minority may have.

As I've argued several times on this blog (here and here, for instance), it is a poor validation of basic human rights to have the majority of the electorate vote for them (as encouraging as it may be in reflecting changing attitudes). Gays and lesbians shouldn't have to have their basic rights be "granted" to them by the electorate. They should be recognized as having existed all along by the only institution that can do that: the courts.

The court in Brown v. Board of Education didn't say that "now" segregation is wrong--it said it had always been wrong. The court in Loving v. Virginia didn't say that "now" laws against mixed-race marriage are wrong--it said they have always been wrong. And when the Supreme Court decides that same-sex couple should have the right to marry, they will not say that "now" same-sex couples have that right, but that they have always had that right--and it just took a while for the law to catch up. 

Mark D. White

The Economist published a short note recently summarizing the results of a forthcoming paper in Cognition that reports that experiment participants "who indicated greater endorsement of utilitarian solutions had higher scores on measures of Psychopathy, machiavellianism, and life meaninglessness" (from the paper abstract). The experimenters presented subjects with variants of trolley dilemmas--either watch five passengers in a runaway trolley car die, or push one bystander onto the tracks to his death to stop the car--and also asked questions to track their psychological dispositions, finding a strong link between the antisocial tendencies and willingness to kill the bystander to save the trolley passengers.

I'm not going to address the secondhand claims by the authors regarding the "characterization of non-utilitarian moral decisions as errors of judgment," which are inevitably and necessarily made from a utilitarian point-of-view; it's the same problem as with Kaplow and Shavell's Fairness versus Welfare, which dismissed nonwelfarist policymaking as insufficiently welfarist. (I happily note that the paper's authors do criticize these statements in the discussion section of the paper.) But I do want to discuss briefly the results reported in the Cognition study, and explain why I have mixed feelings about it.

First, the trolley problem is too nuanced to make a quick-and-easy judgment regarding deontology and utilitarianism (as the authors acknowledge in the discussion section of the paper, albeit for different reasons). True, simple utilitarianism would demand that, all else aside, you kill the one person to save the five. But a deontological outlook--which is much less well-defined--would not necessarily forbid this, as deontology is not categorically opposed to consequentialist considerations. Rather than simply comparing one to five and making a decision based on the equally valid interests of all the person involved (as a utilitarian would), a deontologist would more likely think about the moral status of the individuals in the case, considering any factors related to responsibility or desert in that particular situation. After ruling out such concerns, a deontologist--even a Kantian--may very well kill the one to save the five (for instance, by judging the duty to save five people to have a "stronger ground of obligation" than the duty not to kill the one, according to Kant's only guidance in such cases of conflicting obligations). The brute utilitarian would regard the decision as the implication of a simple comparison (1<5), while the deontologist would more likely use judgment based on the rights of the persons involved--even if they both come to the same result.

Furthermore, the trolley dilemma also wraps up in it the relative moral status of acts and omissions (itself tied into the deontology vs. utilitarianism debate), as well as issues of identity and virtue (am I the kind of person who can take a life, even to save others?), which themselves have greater implications if taking the one life leads to a change of attitudes toward future moral dilemmas. In other words, the trolley problem should not be used as a moral barometer distinguishing between utilitarianism and deontology. This becomes particularly clear when one considers the different reactions people have to the surgeon problem, in which a surgeon considers harvesting organs from his healthy colleague to save five patients who will die without them--very few endorse this action, even those who would push the bystander in front of the trolley, but it can be difficult to parse out the salient differences in the two situations. (Several variants of these problems, including both the trolley and surgeon dilemmas, were used in the study, apparently with no distinctions made.)

As any regular readers of my work (either on this blog or in print) know, I'm no fan of utilitarianism. But I would never go as far as to say its adherents and practitioners are psychopaths. Utilitarians obviously do care about the well-being of people--my problem is that they are concerned with aggregate well-being that ignores the distinctions between persons (as Rawls said so well) and the inherent dignity and rights of each (as Kant wrote). And that is problematic: regarding persons as nothing but contributors to the collective good implies that each person has no independent, distinct value. And if so, why care about people's interests at all? To my mind, the utilitarian's disregard for the dignity of the individual is self-defeating, since it eliminates any imperative to consider persons' well-being at all (much less to consider it equally with all others').

Of course, the popular press coverage leaves out all of the nuance and qualification present in the academic article, but that is par for the course. The study's authors recognize, of course, that all the "psychopathic" respondents who chose the "utilitarian solution" are not necessarily well-read in Bentham or Mill, nor did they necessarily use utilitarian thinking at all. Nonetheless, the results are suggestive, and if it leads us to look at the differences between utilitarians and deontologists in a different way, it's all good--and right!

Mark D. White

In a recent "The Shrink and the Sage" piece in the Financial Times Magazine, Julian Baggini (prolific popularizer of philosophy) and Antonia Macaro discuss the pursuit of happiness, which is very interesting in itself, but I was particularly amused by how Baggini started his half of the discussion:

When psychology and philosophy filed for divorce about 100 years ago, they faced the common dilemma of how to divide the book collection. In the end, psychology left most of the volumes on happiness and the good life with philosophy, which dutifully left them to gather dust. Now that psychology has returned to the subject with gusto, there is an urgent need to dig them out again.

Of course, economics and philosophy had their own break-up, perhaps a little earlier, so it may be fun to ask: how did they divide their book collection? Some speculation...

• Economics only took one Adam Smith book--but didn't read it--and philosophy lost the rest for years.
• Economics was more than happy to take the Bentham, but forgot the Mill (both the philosophy and economics).
• Most tragically, economics chose to take the calculus books rather than Kant--and we all know how that turned out.

Any others?

Mark D. White

The theme of the latest issue of Social Philosophy and Policy (28/2, July 2011) is Liberalism and Capitalism, and the line-up of authors and topics is very impressive:

THE PARADOX OF JOHN STUART MILL (Alan Charles Kors)

CAPITALISM IN THE CLASSICAL AND HIGH LIBERAL TRADITIONS (Samuel Freeman)

FOUNDING LIBERALISM, PROGRESSIVE LIBERALISM, AND THE RIGHTS OF PROPERTY (Ronald J. Pestritto)

THE PROPERTY EQUILIBRIUM IN A LIBERAL SOCIAL ORDER (OR HOW TO CORRECT OUR MORAL VISION) (Gerald Gaus)

JUDICIAL LIBERALISM AND CAPITALISM: JUSTICE FIELD RECONSIDERED (Michael P. Zuckert)

LIBERTY AFTER LEHMAN BROTHERS (Loren E. Lomasky)

A LOCKEAN ARGUMENT FOR UNIVERSAL ACCESS TO HEALTH CARE (Daniel M. Hausman)

EUVOLUNTARY OR NOT, EXCHANGE IS JUST (Michael C. Munger)

RULE CONSEQUENTIALISM MAKES SENSE AFTER ALL (Tyler Cowen)

LIBERALISM, CAPITALISM, AND “SOCIALIST” PRINCIPLES (Richard J. Arneson)

ARE MODERN AMERICAN LIBERALS SOCIALISTS OR SOCIAL DEMOCRATS? (N. Scott Arnold )

Mark D. White

In the latest issue of Erasmus Journal for Philosophy and Economics (4/1, Spring 2011), there is an interview with Daniel Hausman, in which he discusses his views on methodology (with a particular focus on Mill) and his upcoming book on preferences (of which his recent paper "Mistakes about Preferences in the Social Sciences" is apparently a preview). He also describes the path he took to studying the philosophy of economics and his early background--very interesting. (I also strongly recommend another recent paper of Dan's, "Hedonism and Welfare Economics," in which he critiques the use happiness as a measure of well-being.)

Also in the journal you'll find an exchange on critical realism between Simon Deichsel, Uskali Mäki, and Tony Lawson; Irene van Staveren's review of Economic Pluralism, edited by Robert Garnett (a contributor to Accepting the Invisible Hand), Erik Olsen, and (guest blogger) Martha Starr; and a review of Debra Satz’s Why Some Things Should Not Be for Sale: The Moral Limits of Markets by Joseph Heath (a contributor to The Thief of Time).

Mark D. White

The latest issue of Utilitas (23/1, March 2011) contains some very interesting articles; it was very difficult to select just a few to highlight, but here they are:

MOZAFFAR QIZILBASH, Sugden's Critique of the Capability Approach

In comparing Sen's work with Mill's, Sugden criticizes Sen's capability approach because it may be applied in such a way that society or theorists judge what is best for people and potentially restrict liberty on that basis. Sugden cites Nussbaum's work as evidence in making his case. Sugden's critique of Sen's approach succeeds on a narrow reading of it. On that reading Sen is also critical of it because it does not leave enough room for liberty. On a broad reading, the critique has less force. Nussbaum's approach follows Mill in allowing people freedom to act on whatever desires they have if this does not harm others. This neutralizes the central element of Sugden's critique as it applies to her approach to some degree. Both Sen and Nussbaum nonetheless recognize the danger of illiberal restrictions in application which motivates Sugden's critique.

BEN COLBURN, Autonomy and Adaptive Preferences

Adaptive preference formation is the unconscious altering of our preferences in light of the options we have available. Jon Elster has argued that this is bad because it undermines our autonomy. I agree, but think that Elster's explanation of why is lacking. So, I draw on a richer account of autonomy to give the following answer. Preferences formed through adaptation are characterized by covert influence (that is, explanations of which an agent herself is necessarily unaware), and covert influence undermines our autonomy because it undermines the extent to which an agent's preferences are ones that she has decided upon for herself. This answer fills the lacuna in Elster's argument. It also allows us to draw a principled distinction between adaptive preference formation and the closely related – but potentially autonomy-enhancing – phenomenon of character planning.

SANDRINE BERGES, Why Women Hug their Chains: Wollstonecraft and Adaptive Preferences

In a recent article, Amartya Sen writes that one important influence on his theory of adaptive preferences is Wollstonecraft's account of how some women, though clearly oppressed, are apparently satisfied with their lot. Wollstonecraft's arguments have received little attention so far from contemporary political philosophers, and one might be tempted to dismiss Sen's acknowledgment as a form of gallantry. That would be wrong. Wollstonecraft does have a lot of interest to say on the topic of why her contemporaries appeared to choose what struck her as oppression, and her views can still help us reflect on contemporary problems such as the ones identified and discussed by Amartya Sen. In this article I will argue that a close look at Wollstonecraft's arguments may lead us to rethink some aspects of Sen's discussion of the phenomenon of adaptive preferences.

KEITH HORTON, Fairness and Fair Shares

Some moral principles require agents to do more than their fair share of a common task, if others won't do their fair share – each agent's fair share being what she would be required to do if all contributed as they should. This seems to provide a strong basis for objecting to such principles. For it seems unfair to require agents who have already done their fair share to do more, just because other agents won't do their fair share. The philosopher who has written most about this issue, however, Liam Murphy, argues that it is not unfair to do so, at least in the standard sense of that term. In this article, I give Murphy's reasons for saying this, explain why I think he's wrong, and then say a little about why this issue might be important.

MATTHEW TEDESCO, Intuitions and the Demands of Consequentialism

One response to the demandingness objection is that it begs the question against consequentialism by assuming a moral distinction between what a theory requires and what it permits. According to the consequentialist, this distinction stands in need of defense. However, this response may also beg the question, this time at the methodological level, regarding the credibility of the intuitions underlying the objection. The success of the consequentialist's response thus turns on the role we assign to intuitions in our moral methodology. After presenting the demandingness objection to consequentialism and revealing the underlying methodological stalemate, I break the stalemate by appealing to research in the cognitive neuroscience of intuitions. Given the evidence for the hypothesis that our moral intuitions are fundamentally emotional (rather than rational) responses, we should give our intuitions a modest (rather than robust) role in our moral methodology. This rescues the consequentialist's response to the demandingness objection.

EZEQUIEL SPECTOR, Do You Deserve To Be Talented?

Are inborn characteristics deserved or undeserved? Using Bertrand Russell's theory of descriptions and Peter Strawson's objection to this theory, I argue that this question does not make sense. In order to know whether a person deserves something she has, it is necessary to evaluate what she did before having it. But people did not exist before their birth, so they did not exist before having their inborn characteristics. Therefore, talking about people deserving their inborn characteristics does not make sense: these characteristics are neither deserved nor undeserved.

Mark D. White

In the latest issue of Politics, Philosophy & Economics, there is a symposium on John Stuart Mill's moral theory. It seems my library no longer has access to this journal, but the articles are:

D.G. Brown, Mill’s moral theory: Ongoing revisionism

Dale E. Miller, Brown on Mill’s moral theory: A critical response

Jonathan Riley, Mill’s extraordinary utilitarian moral theory

Any comments on the articles, or the symposium as a whole, would be most welcome.