A Short History of Economics as a Moral Science

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Economics grew out of moral philosophy and eventually became one of the moral sciences. At some point the mainstream of economics became detached from the moral sciences and then from morality itself. I will argue that this detachment from moral concerns is not part of the tradition of economics. It emerged only during the present century.

There are two major reasons why economics has become detached from moral concerns. First, the natural sciences came to be seen as successful, and the attempt was made to emulate that success in economics by applying natural science methods, including mathematics, to economic phenomena. Second, the self-styled economic science came to adopt positivism, which ruled out moral issues from science itself. These points will be demonstrated below. It is a widely held view today among mainstream economists that economics is free from any ideological, theological, or moral philosophy. One commentator on the role of ethics in mainstream economics has stated:

   The "scientification" of economics ... has led to a separation of
   economics from its ethical roots. The "mainstream economics" of the
   twentieth century fully accepts this separation. Economic theory is
   seen as a positive science which has to analyse and to explain the
   mechanisms of economic processes.... Important as ethical valuations
   ("ought"-statements) may be, they should not form part of the
   economist's research programme. (1)

Similarly, a recent commentator on the role of positivism in economics argued this way:

   Most economists today ... would agree that the claim of an economic
   theory free from values is essential in establishing the scientific
   nature of the discipline. A positive, value-free economics, in the
   sense of not relying on any particular set of value judgments or on
   any philosophical or psychological framework, is generally seen as
   ideal. This approach has crucially influenced important branches of
   economics such as microeconomic theory. (2)

Many others have expressed similar views. (3)

Modern economics stresses rational calculation, the baser material objectives, and scientific neutrality on moral issues. But these foci can easily slip into something else. For example, one of the leading microeconomists, David Kreps, says that "a sparse set of canonical hypotheses--... greed, rationality, and equilibrium--became the maintained hypotheses in almost all branches of [economics]." (4) The slip into the assumption of "greed" is easy to make.

What is the moral effect of promulgating this view on the behavior of economics students? Experiments have been conducted to see whether humans cooperate or attempt to "free ride" (5) in a range of situations. In one study it was found that people were generally cooperative or public spirited, except for a group of first-year graduate economics students: The latter were less cooperative, contributed much less to the group, and found the concept of fairness alien; the economics students were "much more likely to free ride" than any other group tested. (6) On this same study, Hausman and McPherson comment: "Learning economics, it seems, may make people more selfish." (7) More recently, Frank, Gilovich, and Regan found in their experiments that students of economics, unlike others, tended to act according to the model of rational self-interest and concluded that "differences in cooperativeness are caused in part by training in economics." (8) This conclusion leads them to recommend that economists "stress a broader view of human motivation [than rational self-interest] in their teaching." (9) By producing selfish and uncooperative individuals one may think that there is evidence for the actual detachment of economics from ethics.

The essay that follows shows the genesis of economics as a moral science and chronicles some of the developments in mainstream economics that metamorphosed the discipline to the point where moral concerns are now irrelevant. …