In Ethics in Economics , Jonathan B. Wight provides an overview of the role that ethical considerations play in economic debates. Whereas much of the field tends to focus on welfare outcomes, Wight calls for a deeper examination of the origin and evolution of our moral norms. He argues that economic life relies on three interrelated ethical systems: outcome-based, duty- and rule-based, and virtue-based. Integrating contemporary theoretical and applied research on ethics within a historical framework, Wight provides a thorough and accessible outline of all three schools, explaining how they fit or contrast with the economic welfare model. The book then uses these conceptual underpinnings to examine a range of contemporary topics, such as the 2008 financial crisis, the moral limits to markets, the findings of experimental economics, and the nature of economic justice. Wight's analysis is guided by the innovative concept of ethical pluralism-the recognition that each system has appropriate applications, and that no one prevails. He makes the case that considering a wider moral framework, rather than concentrating on utility maximization, can lead to a richer understanding of human behavior and better policy decisions. An incisive overview in a blossoming area of interest within Economics, this book is ideal for undergraduates or uninitiated readers who seek an introduction to this topic.
Autorentext
Jonathan B. Wight
Inhalt
Moral norms arising from virtue and duty ethics complement the standard economic welfare model in helping explain economic outcomes and the operation of economic institutions. Both positive and normative economics are enhanced by a pluralist understanding of ethics as a part of critical thinking. Economic solutions usually involve tradeoffs not only between competing normative values but also between competing ethical frameworks of analysis. The Chevy Malibu exploding gas tank case illustrates a case of asymmetric information and moral hazard. In this circumstance, blindly following economic logic, with poorly understood ethical frameworks, can lead to disastrous outcomes. A pluralist approach provides a three-dimensional viewpoint, and better aligns with Adam Smith's moral sentiments model.
This chapter explores the idea that ethics means producing the best outcomes. Individuals in society desire numerous outcomes, including freedom, justice, economic growth, and so on. Various consequentialist theories are examined including ethical egoism, Act and Rule Utilitarianism, neoclassical welfare analysis, and others. The chapter investigates the problems of value and aggregation that are present when using this framework. Jeremy Bentham is a founder of classical Utilitarianism, which seeks to evaluate outcomes using the hedonistic calculus of pleasures and pains. John Stuart Mill elaborates a refined version of this approach. The chapter proceeds develops ideas in historical context and explores their evolution. A critique of these approaches leads to the need for complementary ethical frameworks.
Is winning the only thing that values? Non-consequentialist ethical frameworks arise from principles and virtues that direct behavior yet are not motivated by expected outcomes. These moral frameworks are complementary with outcome based ethics and needed for a good society. For example, the Utilitarian approach provides no protection for individual rights. This chapter explores Kantian ethics, natural rights, and other rule-based systems such as the Ten Commandments. It then explores the difficulties with these approaches and concludes with a discussion of virtue-based ethics in various forms: Aristotle, Confucius, Adam Smith, and Deirdre McCloskey.
Maximizing the economic surplus is the normative outcome that is said to be desirable for the economy to be "efficient." Supply/demand curves are explained to show how they can be used in normative analysis to demonstrate a Pareto optimal market outcome under ideal conditions. The chapter is designed to draw readers inside the graphs to understand how real people are affected by market prices, whether through the consumer or producer surpluses. The normative economic approach to scarcity is shown to be a powerful philosophical idea, yet readers should not forget that efficiency is an ethically laden concept. This chapter is optional for readers with advanced training in economics.
The standard welfare and efficiency approach is sometimes portrayed as uncontroversial and purely scientific. By contrast, this chapter shows that ethical precepts lie at the heart of these topics. Economists have abandoned the notion that voluntary trades are the only basis for reaching efficiency. Cost-benefit calculations rely on the Kaldor/Hicks formulation of potential Pareto improvements and therefore rely on compulsion. As a result, the Buchanan critique is that costs estimates are always somewhat arbitrary. The Kelo eminent domain case and the Three River Gorges dam in China show that the ethical justification for efficiency relies on moral norms and institutions. Economics cannot be a universal science when background circumstances of institutional frameworks (human rights, free press, free exit, and impartial judiciary) are critical for determining the ethical suitability of cost/benefit analysis.
Instrumental views of human welfare conflict with substantive views, particularly in economic development. This chapter explores criticisms of the preference satisfaction approach arising from false beliefs, "polluted" or endogenous preferences, and other factors. If preference satisfaction is a limited measure of human welfare, this leads to different accounting measures of success such as the capabilities approach and the Human Development Index (HDI) of Amartya Sen. It also could imply a role for paternalism in government policies designed to improve substantive measures of well being (e.g., life-expectancy or happiness). The chapter concludes with an appeal for pluralism in evaluating economic outcomes and processes.
Why do societies restrict or ban particular market transactions? In earlier times, "just price" doctrine regulated market activity. Moral limits today arise for at least two distinct reasons (see Michael Sandel): a repugnance at selling particular kinds of goods and services that embody beliefs relating to intrinsic values; and a rejection of market price as an allocation mechanism in particular background circumstances of trade. If intrinsic motivations are important, market prices might crowd out altruistic supply. Considerations of intrinsic value, background circumstances, fairness, duty, and character arise in considering the commodification of bodily organs and other practices, and in arguments for policies such as a living wage, laws against discrimination, and Kantian ethics. Markets are also found to enhance virtues in particular circumstance.
Adam Smith had a profound interest in human sociability. A market economy relies upon self-interested actors, yet economic actors are linked by moral norms that produce self-restraint and trust. This chapter explores the experimental and laboratory evidence for Adam Smith's model. The "Ultimatum game" shows that people rout…