This blog is generally about current policies or issues in the news or that are still current to a degree in the realm of political economy, politics, and economics.  I have been reading a really interesting book by Jonathan Wight, entitled Ethics in Economics: An Introduction to Moral Frameworks (Stanford University Press, 2015).  Wight addresses in detail one of the hottest issues among economic thinkers–it has been pretty hot among political philosophers for centuries and was once current among those who thought about economic kinds of problems.  But among economists, the appeal to moral philosophy (ethics) declined after the eighteenth century and was largely pushed aside by Utilitarianism until recently.  I happen to believe the relationship of ethics to economics–not to mention political thought–is one of the most important considerations for everyone concerned with free markets and the question of moral (if not governmental) limits on any temptation to apply only Utilitarian principles.  Bringing ethics into economic discussions is not new.  Adam Smith himself wrote The Theory of Moral Sentiments  in 1759 for that very purpose–before he wrote The Wealth of Nations (1776).  Economic thinkers continued in this vein until ethics and economic thought were essentially disconnected in the early to mid-nineteenth century (see Anthony M. C. Waterman, Revolution, Economics, and Religion: Christian Political Economy, 1798-1833.  Cambridge University, 1990).  I hope to contribute here to a renaissance of that relationship.

This is getting a bit into the “weeds,”as some say, so let me back up and define some terms first.  I will begin with the terms “economics,”ethics” and “Utilitarianism,” but there will be more.  Economics deals with human action in material or non-material transactions between individuals or individuals and other entities (corporations for example), assuming in the end, however, that all transaction eventually reduce to individuals.  So we are addressing quid pro quo exchanges in “places” called markets–the latter which can be hypothetical locations not even physically near the other parties to the transaction.  Economics also deals with the limits on market activity allegedly or in reality necessitated by the existence of market imperfections (about which Deirdre McCloskey has recently written) such as public goods, externalities, monopoly, and common pool resources (a sub-set of public goods).  These imperfections are then thought to be limits on markets’ abilities to to bring about both efficient transactions or exchanges.  Note that the key word in the measurement of the outcome of imperfect markets is efficiency, a term mostly equating to a Utilitarian philosophy that in turn examines costs and benefits in terms of the overall consequences of the transaction.  While ethics in the traditional sense is not necessarily missing–Utilitarianism itself is an ethical philosophy–it plays little or no role in the usual sense of the term ethics understood as referring to “the good.”  Economists frequently do not even like to be associated with thinking about what is good, but rather only with costs and benefits measured in some conventional way but without reference to the values involved.  This is why many economists have argued that economics is a positive science, that is, it can tell us only what is the case, the outcome, of a particular action, but not a normative science, that is, what ought to be the outcome in terms of value.

Ethics is defined as the study of what is good in the sense of what is to be valued, by an individual or collectively (although collective value determination has its own problems).  But different systems of ethics lead to differing conclusions about what is to be valued or not, and how exacttly to attach value.  The book by Wight (as well as work by a few other economic thinkers) theorizes that economics does and ought to include other ethical standards besides Utilitarianism, for example Deontological Ethics (Kantian) and Virtue Ethics.  What he means is this: (1) frequently when we think about economics we do “sneak in” these ethical ideas and (2) we would be well-served to do so consciously in our thinking about economic issues.  Wight raises, I believe, a very important consideration.  He is suggesting that when we consider what economic actions we ought to either allow or engage in (as in governmental policy), perhaps we should think also about how ethics might impinge on that freedom to act or on that policy proposal.  This is not at all to say that freedoms in the market should necessarily be constrained or that policies necessarily ought to be undertaken to expand the economic scope of government.  The point is not that ethical considerations are or should lead to modern liberal, meaning non-conservative in American terms, or anti-market actions.  The point is that ethical values should play an important role in helping us think beyond what Deirdre McCloskey calls “Max U.”  

I would only add one major suggestion for Wight.  He should also have included discussion of the two major Christian traditions of ethics:  Natural Law and Divine Command Theory or Modified Divine Command Theory.  If Utilitarianism focuses on some kind of cost-benefit calculus, Kantian ethical theory focuses on duty, and Virtue Ethics focuses on the inner character of the individual, Natural Law and Divine Command Theory fill out some elements missing in the three Wight includes.  In fact, writing from a Christian perspective, these latter two ethical theories are essential for an adequate examination of economic issues.

Natural Law theory is defined by its law-like principles that are “an ordinance of reason, for the common good, …which the mind can grasp,” and whose rules are established by God Himself (see J. Budziszewski, What We Can’t Not Know: A Guide.  2011).  Humans are capable of knowing the rules of ethics given by God, and in fact, it is argued, they do know them, but choose not to acknowledge or obey them, or have not yet sufficiently reasoned to them (the latter case is that of a child).  Divine Command Theory is based directly on special revelation itself, the Christian Bible of the Old and New Testaments.  Ethical principles are derived from that revelation through interpretation of the Ten Commandments or other ethical texts.  Natural Law is said to be a more general form of special revelation and for some aspects of what humans need to know, it is inadequate and must be supplemented by Scripture.  We can argue about the overall adequacy of Natural law, and I have reservations about it.  Nevertheless, Classical Natural Law and Divine Command Theory, properly understood, provide crucial ethical principles that are timeless, objective and universal, and are therefore authoritative wherever they may have application.  This includes the economic realm as well as the political.

I realize it is not common to associate this kind of ethical talk with economics, as it is with political thought.  But it is time to do so and I am happy to report that it is happening, even among free market economists.  I do not believe there is any inherent conflict with classical liberal (equivalent to conservative in America) economic thought and either Natural Law or Divine Command Theory.  But the relationship of those two ethical systems and economics has yet to fully worked out to show their compatibility.  The ultimate goal of this rediscovered relationship is to promote genuine human flourishing, while realizing that this flourishing is not itself the highest good of God Himself.  I hope to participate in some of those endeavors in the near future.