Academic journal article Review of Social Economy

Ethics and Social Economics: ASE Presidential Address, January 2004, San Diego, California

Academic journal article Review of Social Economy

Ethics and Social Economics: ASE Presidential Address, January 2004, San Diego, California

Article excerpt

Abstract In this talk I pull together my past work on the role of ethics in economic theory. In doing so I note that mainstream economic theory is permeated with an ethical viewpoint and that any alternative approach, including social economics, necessarily must be so also. I outline the alternative theories of normative ethics and illustrate how they impact the doing of economics and the setting of economic policies. But this is just a beginning. A major challenge for social economists is to carry forward the task of incorporating a richer ethics into the practice of economics.

Keywords: commodification, consequentialist, deontological, preference sovereignty, self interest, value permeation, virtue theory, world view

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Presidential addresses rarely report on new research. Sometimes they are general reflections on the state of the discipline, sometimes they are challenges to the discipline to pursue solutions to certain current policy issues, and sometimes they are attempts to pull together the presenter's past work. My talk today will do the latter and point to future directions we need to pursue.

My work over the past 20 years has focused on the role of ethics in economic theory. I have argued that mainstream economics is permeated with an ethical viewpoint and that any alternative economic approach, including social economics, necessarily must be so also. Recognizing this will facilitate the creation of a better economic theory and the construction of wiser economic policies. Thus, I will do the following three things. First, I will briefly note how economics is value permeated and why it must be. Second, I will outline some alternative ethical approaches. Finally, I will discuss how one might go about using these alternatives.

VALUES, WORLD VIEWS AND THE ECONOMIST

There are two pervasive tenets to the value-neutrality argument. The first is a reliance on the Humean guillotine which categorically separates fact ("what is") from value ("what ought to be"); also known as the positive/normative dichotomy. The second basic tenet strongly supports the first by claiming that since we have objective access to the empirical world through our sense experience, scientists need not concern themselves with "what ought to be." This second tenet is the really crucial point and the one which post-positivist philosophy of science has sought to undermine.

A counter line of reasoning, Kuhnian in character, speaks of paradigms, characterized by the shared values of a given scientific community. (1) It is Kuhn's rejection of the second tenet that we have objective access to the empirical world through our sense experience--that is important for those opposed to the value-neutrality position. He argues that the empirical world can be known only through the filter of a theory; thus, facts are theory-laden. Years of schooling are important facts because they are proxies for human capital and human capital in turn is important because neo-classical theory says that is what explains a major portion of income differences. In another theory years of schooling might be replaced by labor market discrimination and family wealth as more important facts. Thus, a major argument of those who build on Kuhn's approach runs as follows: A world view greatly influences the scientific paradigm out of which one works; value judgments are closely associated with the world view; theories must remain coherent with the world view; facts themselves are theory-laden; therefore, the whole scientific venture is permeated by value judgments from the start. This world view shapes the interests of the scientist and determines the questions asked, the problems considered important, the answers deemed acceptable, the axioms of the theory, the choice of relevant facts, the hypotheses proposed to account for such facts, the criteria used to assess the fruitfulness of competing theories, the language in which results are to be formulated, and so on. …

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