Our reading this week was “Ethics in Economics” by Charles Wilber from the PAE Review.
Some Q’s:
1) How would our educations/textbooks change with the acknowledgment of value-permeation and the always “theory-laden” character of any analysis?
2) How does the policy conversation change?
3) What are the implications of seeing mainstream economic theory (or any theory, for that matter) working within a bounded paradigm?
Some links:
In this paper, Wilber alluded to the work of Thomas Kuhn and Deirdre McCloskey. Here are links to their wikipedia’s.
1.How would our educations/textbooks change with the acknowledgment of value-permeation and the always “theory-laden” character of any analysis?
Essentially every micro textbook that I’ve seen has small area dedicated to this. Any time you see the equity/efficiency tradeoff mentioned, it is a reminder that economic analysis tells us more about some values than others.
As a side note, I think Wilber is somewhat mistaken in how he describes Neoclassical values/assumptions:
“The purpose of human life is for individuals to pursue happiness as they themselves define it. Therefore, it is essential that they be left free to do so.”
Neoclassical economics says no such thing about the purpose of human pursuit. It predicts that humans will behave in self-interested ways, but this tells us nothing about values. Neoclassical economics does make a strong case that individuals be free to pursue their interests. However, this is justified by utilitarian reasoning, not ethical egoist reasoning.
Neoclassical economics claims that non-coercive transactions only happen when both parties benefit and total utility will increase (in the absence of market failures). Really, the whole presence of market failures of neoclassical economics shows that it is not in any way based on ethical egoism.