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Ethics and the Economist: Beyond the Split

by Julie Nelson • June 13, 2011 @ 12:02 pm

The following is an excerpt from Julie Nelson’s paper for E3 Network, Ethics and the Economist: What Climate Change Demands of Us. You can read part one of her series on ethics and the economist here.

To many economists, the discussion of ethics seems to be beside the point. Economic analysis is sometimes perceived of as value-free and objective, while ethical judgments are normative and subjective. Such views have been debunked at length by climate economists (e.g., Howarth 2003; Dietz and Stern 2008), as well as philosophers (e.g., Putnam 2003; Kitcher 2011), and a full analysis will not be attempted here. Suffice it to note that contemporary Neoclassical orthodoxy contains myriad value-judgments, that only appear as objective from within a culture of disciplinary group-think in which alternatives are simply not entertained. The unquestioned priority given to individual freedom of choice, for example, is clearly a value judgment, in that it ranks freedom above other possible — for example, more pro-social or pro-environment — values. The methodological valuing of the elegance, precision, and “artificial crispness” (Weitzman 2009, 18) of mathematical models of optimization involves a normative and subjective judgment that these qualities are of more worth than other methodological goals, such as richness or realism. And, of course, economists should recognize the issue of opportunity cost: Research is not done in a vacuum, and the very question of our salaries and research budgets is based on decisions that value some lines of research above others. If we are absorbed in rearranging deck chairs on the Titanic when we could have helped chart another course, we will bear some moral responsibility for the ship going down.

Alternatively, we as economists may realize the relevance of ethics, but consider it to be in the domain of the Philosophy Department. Paying more attention to ethics might seem to mean that we must become versed in deontology, consequentialism, virtue ethics, Kant, Rawls, Aristotle, and the like — or at least read those economists who try to translate such material into more familiar terms. Believing that such an investment is necessary before one can take an ethical stand, however, could be compared to believing that one must invest in economics graduate training before one can be allowed to make a purchase at the grocery store. Ethics is not something owned by the philosophy department, but rather something we, inescapably, do — just as we also, by virtue of being human, participate in economic life.

In fact, by deflecting our attention from the world we actually live in to the artificial rarified worlds lived in by the “liberal man” of traditional analytical philosophy and the “economic man” of orthodox Neoclassical economics, some discussions of moral philosophy and economics can be actively harmful. For example, Oxford moral philosopher Jonathan Broome has penned, among other works, a background piece for the Stern Review on Climate Change (2006) and a high-profile article on climate ethics for Scientific American (2008). His background piece is thoroughly based on economistic expected utility theory and the reductionist ethics of aggregating quantities and qualities of life dependent only on utilities from the consumption of goods (2008, 15). In his 2008 article, Broome’s assertion that future generations will “be richer than we are” seems to be borrowed from economists who project GDP growing forever. Such an assertion, of course, is based on nothing more than unscientific extrapolation about the entire future based on the very recent (in human history) past, supplemented by extreme assumptions about the substitutability between natural and other forms of capital. Broome’s “elementary moral principle” that “you should not do something for your own benefit if it harms another person” or at least “compensate” them for it if you do (2008, 97) – reflects the generally status-quo-preserving criterion of Pareto Efficiency enshrined in orthodox economics. While Broome uses his principle to argue that “the better-off among the current generation” should take the first steps towards climate change mitigation, this principle could also be interpreted to mean that if protection of the residents of Bangladesh from climate change harms United States living standards, then Bangladeshis should pay compensation to residents of the United States.

Also taking his lead from economists, Broome insists that the ethical question be formulated in terms of a search for the “correct discount rate” and that philosophers concerned with the extinction of humanity must express the badness of this loss “in quantitative terms” (2008, 102, 100). While taken as a whole Broome’s work comes down on the side of doing something about climate change, he suggests that detailed and quantitatively sophisticated work by ethicists and economists must precede democratic rational deliberation, which in turn much precede action on a societal scale. As in other studies of this ilk, the immediate prescription is not for action, but for further research. That would be a proper and reasonable view — were the world safe, rational, and certain. But what about the world that we live in?

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1 Comment »

  1. The “economic” idea that fossil materials located in the planet’s lithosphere are “energy resources” is pure religion. They are in fact Matter, not Energy. The confusion seems to be rapped up in the concept of explosives (explosive matter) for the primary agenda of modern nation-states: defense via explosive arsenals and their delivery system, not to mention monopolized control by nation-state sanctioned corporations. For example, uranium is the basis of nuclear weapons and for atomic fission propelled submarines (Tridents) that deliver them within range to target. The same can be said for fossil fueled bombers with trinitrotoluene (TNT) bombs.

    What the modern nation-state economies have given to world economics is a global economy of explosives, which are presently contaminating us to death (e.g. global heating and radiological poisons). This is not an “energy system” but ecocidal pathology based on hubris, fraud and a religion of perverse economics.

    In a world of nations which are financially subsidizing fossil material extraction and oxidation to the tune of one-half trillion dollars per year (along with $1.6 trillion of annual militarism) the word economist may be pronounced: Eco? No. Mist!

    Only the most educated and entrenched seem unable to perceive globalized corporate fascism. Any ethics in governance and economics died last century.

    Thanks for continuing to struggle in the pursuit of justice. However, Mother Earth is only warming up. The 21st Century theme will be Meltdown.

    Kind regards, JRN.

    Comment by James Newberry — June 14, 2011 @ 8:46 pm

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