Ethics and Economic Theory

Students often express interest in my classes over the relationship between ethics and economics. If economics seeks to characterize how private households mediate one another’s relationships — how private households shape one another’s production and consumption of economic goods — then where do ethics fall among these relationships?


Students are often disappointed by my response. Economics is not an ethical science. Students find this response disappointing, I suspect, because it is normal to want to feel good (morally) about what one is good at (technically). When we discover that, say, being a skilled practitioner of biology or physics or history or sociology or economics implies nothing whatsoever about our moral character, it often comes as a let-down.

But does this also imply that ethics may not play a role in the problems we choose to explore? I would suggest not. Moreover, with Max Weber, I would argue that the interests scientists display in one problem or another is rarely if ever a matter of pure science. We are interested in what we are interested because of where we have been and where we are going — socially, politically, economically, spiritually. And this suggests that we are authorized — indeed, in some sense obligated — to be curious over why a scientist selected one set of problems rather than another. Perhaps they remember watching a rocket launch as a child; or perhaps they have always been fascinated with numbers; or perhaps someone is giving them buckets of money to better understand the location and extraction of some commodity.

The point is that the better scientist is eager to offer a more comprehensive, more rigorous, characterization of whatever the problem is they are trying to solve. I say this because there is often a presumption that what economists are exploring is “freedom,” or “liberty,” or “choice,” or “growth.” Not only, however, are these not economic categories. With the exception of “growth,” they are economically meaningless. Even growth must, in the end, be stripped of its ethical inflection: growth is not good or bad, desirable or undesirable. Growth either is or it is not.

But let us say that a community says that what it wants is economic growth, or improved test scores, or improved health, or less congestion, or more sustainable agriculture, or — well almost anything. What economists can do is theoretically identify the mechanisms that we have reason to believe might give rise to what a community says that it wants. We can also eliminate policy options that have no likelihood at all of giving rise to these outcomes. We can explain why a community might prefer one policy over another. And we can even model the likelihood of whether a specific community will choose to adopt the policy choices arising from our research and what steps are likely to bring a community to adopt these policy choices. What we cannot do is offer transcendental judgments on what a community should want.

But we can also offer one more significant tool. We can develop models that will tell us the conditions under which economic actors are best equipped to think, reflect, and judge clearly. Happily, most scientists, without necessarily meaning to have been beneficiaries of conditions that help them to think, reflect, and judge clearly. Unfortunately, most of them also find themselves in occupations, eventually, where they will be constrained to bend their knowledge and skill in directions they would not bend them were they not so constrained. This goes as well for economists, who often find themselves constrained by those who pay their salary, whether directly or indirectly.

Such constraints, I would suggest, give rise to less than rigorous modeling; which, in turn, creates an opening for economists who wish to conduct their craft in the absence of such constraints. But, in none of these cases is economic science informing their ethics.

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