Sunday, 18 December 2016

Ethics and Economics



The failing of economics have been widely discussed in the last few years, and now Professors Kim and Yoon have suggested in the Financial Times that ‘an eminent philosopher…should be appointed to take charge of economics’ http://www.ft.com/cms/s/0/32c10a50-a8c3-11df-86dd-00144feabdc0.html. Don’t all rush at once. I doubt they really mean it. And even if they do, we mustn’t fall for our own propaganda: philosophers don’t exactly have a good track record on practical matters.


The grounds for their suggestion is that economics is ‘not a science that only describes, measures, explains and predicts human interests, values and policies – it also evaluates, promotes, endorses or rejects them’ and for these kinds of reasons ‘economics is a dimension of ethics’ and ethics should be ‘organically incorporated into economic discourse’. This all sounds very exciting but I fear it is misleading.

The suggestion is that economics is value laden and as a consequence can’t be done properly without philosophers. There are two ways in which economics might be value laden but only one of them supports the conclusion that philosophers are needed.

Economics might be instrumentally ethical, that is to say, whilst ethics tells us about the value of ends, economics evaluates economic means to those ends. In this case economic prescriptions have the form ‘if you want this end then you ought to take these economic means’.  Such prescriptions have the same normative form as the prescriptions of engineers based in physical theory, but we have no temptation to think philosophers should be in charge of physics (philosophers no doubt have such a temptation, indeed, some think that they are in charge, but I hope nobody else does). It’s worth noting that being instrumentally ethical is a good explanation of most of the reasons that are used to argue that economics (and often the natural sciences) are problematically value laden, including all those that advert to the influence of ideological bias on research and those that appeal to the role of epistemic values in enquiry. Clearly, being instrumentally ethical leaves ethics and economics entirely separable.

So if we’re going to get the job we need  ethics and economics to be inseparable, and for that we need economic truths to be a variety of ethical truths, even when they don’t look like it. Unfortunately this has implausible implications. For example, could the truth of Gresham’s law really depend on whether hedonism or rational desire satisfaction is the true theory of well-being? Obviously not, but that is the kind of thing that would be required.

So thanks for the offer, guys, but it can’t really be defended and anyway, it’s likely to be a bad idea (phronetically speaking)

Originally at http://blog.practicalethics.ox.ac.uk

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