The visible hand in economics

‘Right’ by any other name

Posted on: March 19, 2008

Many critics of economics accuse it of being an amoral pursuit. Conversely, many economists praise the amoral nature of their discipline. It is easy to think that there must be more to this argument than whether economics is morally ‘good’ or not. After all, that seems like an awfully circular and pointless argument. One might ask what characteristics people value that they feel economics lacks. How do people weigh up the characteristics that they throw in a basket termed ‘morals’? Robin Hanson suggests that perhaps, ironically, economists have many of the tools to help them weigh such factors:

Economic analysis tries to infer what people want, largely from actions, and then tries to suggest policies to get people more of what they want… Critics, however, say economic analysis is untrustworthy because it is incomplete, since wants are only one of many moral considerations. But this complaint seems to me backwards… After all, morality is only one of the many ends we pursue. Yes we want to be moral, but we also want other things, and we each choose as if we often care about those other things more than morality.

On this blog we make much of the distinction between normative and positive economics but, of course, it is impossible to entirely avoid making normative judgments when developing a structural framework of behaviour. Do we really just infer what’s good from peoples’ actions? We tend to use the idea of revealed preferences to decide what people want and this depends on the framework of consumer choice theory. how do we then decide what the person should do to improve their lot? Our conception of what constitutes a ‘good’ action is founded in the utilitarian framework laid out by Bentham, Mill and championed today by Peter Singer. When we conclude that an action is optimal, we’re really saying that it is the best thing to do according to the utility maximisation criterion we’ve employed.

Of course, we sit apart from utilitarian philosophers in that we claim only that people behave as if they want to maximise their happiness; we don’t claim that maximising happiness is morally right. Does it then stray into dangerous ground to say that we can use our utilitarian framework to derive an optimal level of morality to employ? Is excusing ourselves by claiming not to be making a normative statement disingenuous, when we use words like optimal to refer to things that are best within our preference utilitarian philosophical framework?


6 Responses to "‘Right’ by any other name"

I am suggesting that we just talk about how to get what we want, and explicitly reject otherwise talking about whether what we do is moral.

“Conversely, many economists praise the amoral nature of their discipline”

Were you thinking of me when you said that?

“claiming not to be making a normative statement disingenuous, when we use words like optimal to refer to things that are best within our preference utilitarian philosophical framework”

I thought that was why we separated efficiency and equity (

Things that are technically optimal are just that, optimal – it does not mean that it maximise’s social welfare which is a normative construct. However, as long as we recognise the distinction it is a useful thing to do. Ignoring the distinction is definitely disingenuous – but that isn’t what we do.

In the case of morality the purpose of economic analysis would be to represent the trade-off, not work out what is the socially optimal value of morality. By representing what the trade-off is we bring something to the table which can be used in a broader normative study of the issue.

I think the concept of utilitarianism, as usually employed, has a strong normative element – specifically the idea that society’s interests can trump individual rights. Of course utilitarianism doesn’t necessitate that conclusion, but it’s hard to stop it creeping into the analysis.

“specifically the idea that society’s interests can trump individual rights”

That depends on the value we associate with each of those factors doesn’t it? Sometime in the next few days I’m going to do a post on that sort of stuff – however I need time, and I currently don’t have any 😛

[…] we have discussed earlier, if we are willing to abstract sufficiently we should be able to place equity and […]

[…] in fact this is a favored measure we have for actually revealing (to some degree) what is optimal (here, here, can’t actually find any of the tax posts […]

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