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Is medicine a model for ethics in economics?

February 24, 2014 7 comments

from Peter Radford

A recent correspondent asks whether medicine could act as a template for the importation of ethical standards into economics. On balance I don’t think it can. Here’s why:

Medicine consists of a practical part that faces outward towards its customers. We call those customers patients. From the earliest times medicine has adopted the credo ‘first do no harm’ which forms the ethical bedrock for all subsequent standards. This is relatively easy to do since ‘doing harm’ is quite quickly identified. Even then such an ethical background failed to stop the development and implementation of some outrageous and harmful medical techniques. In the modern era the ‘doing no harm’ ethic has allowed the creation of a number of rules that govern doctor activity and provide a measure of protection to patients. Those rules are enforced by various governing bodies that not only establish and monitor the rules, but also govern the very process that allows someone to call themselves a doctor in the first place. This governance structure gives practical medicine a coherence and shape that are identifiable by the public, and ensures that the profession recognizes it relationship with society at large. Read more…

Skill or dumb luck?

January 9, 2014 19 comments

from Peter Radford

Both.

Be very wary of anyone who claims that their wealth is the result of great skill. Or even hard work. Luck had to play a part. Usually a very significant part. And dumb luck ought not be the basis upon which we build intelligent, caring, or stable societies.

Be wary, also, of arguments against popular policies that include references to envy or jealousy. Being opposed to plutocracy does not necessarily imply either. Those arguments are old and have been used to undermine the moral authority of populism since democracy first reared its ugly head and disrupted the ease with which our leaders could syphon off wealth for their own enjoyment.

The two go hand in hand.

Populists will be accused of devaluing hard work and skill, and of stirring up the evil sentiment of envy that is presumed to lie close to the surface in the squalid and uneducated minds of the masses. By being both an advocate of sloth and jealousy a populist is easily and summarily dismissed as being irrelevant to policy discussions and properly ignored by serious analysts everywhere,

Where being serious means combining allegiance to the economic status quo with a suitable level of puritanical moral self-abuse.  Read more…

Categories: ethics

“Such an economy kills”

December 3, 2013 79 comments

from David Ruccio

The other day, I posted a few paragraphs from the new Roman Catholic Pope Francis’s apostolic exhortation Evangelii Gaudium (which translates as “The Joy of the Gospel”).

I’ve now had a chance to read the entire text (available here), which seems to have gotten some notice around the world (although, best I can tell, there’s still no comment from the likes of Paul Ryan, who would steal bread from the mouths of the poor in the name of saving them from anything but the market).

The document as a whole is a call to a new kind of evangelization on the part of Catholics, both clerical and lay. (On Michael Sean Winters’s interpretation, “The Pope is calling the Church to be a missionary Church, an evangelizing Church, and the privileged path of fidelity to the Gospel is service to the poor.”) The main sections on economics are located in chapter 2 (“Amid the Crisis of Communal Commitment”) and chapter 4 (“The Social Dimension of Evangelization”).

The paragraphs I posted before are from chapter 2, in which Francis identifies the nature of the world in which he is making his call for a new missionary church. Permit me to repeat them here: Read more…

Categories: ethics

Ethics and Economics

November 11, 2013 Comments off

from Maria Alejandra Madi and the WEA Pedagogy Blog

After the Second World War,  the idea of  development was associated with the active role of the national state that would support the sustainability of economic growth with social inclusion. After the Bretton Woods crisis, in the seventies, and with the advance of financial globalization, the institutional arrangement of the Welfare State has been shaken. As a result, both the  instruments of economic policy and the attendance of social demands were put in question in a context of the redefinition of  the scope of public policies.

After some decades, it is a reality that global economic  integration, guided by market credibility and financial rules, has broadened social exclusion. As a matter of fact, the new interconnections between wealth, production, labor and consumption have strengthened inequalities. Indeed, the apprehension of the current global inequality issues involves the understanding  of the deep tensions between the hypertrophy of finance in economic dynamics and the expectations of society about citizenship, labor and income.   read more here

How free markets corrode your character

July 16, 2013 2 comments

from Lars Syll

For centuries, economists have argued that nothing beats a free market for efficiency. Unfettered competition leads to lower prices and better products, more innovation and greater choice. But market forces may also make people less ethical and more selfish.

There is no shortage of speculation on the topic by philosophers and social scientists. But the supply of empirical evidence on the topic has not kept up with the demand. Armin Falk and Nora Szech, two behavioural economists from Germany, have made a contribution.

In a series of experiments, a group of German volunteers were offered a choice between Read more…

Creating an Economics for the 21st Century

May 15, 2013 22 comments

guest post from Rob Johnson

In the wake of the 2008 financial crisis, many of our policy makers and top economists are still stumbling in the dark.

One needn’t look far for proof. The symptoms of their failure are everywhere. Financial markets remain too volatile and crises too common. Inequality is raging and increasing around the globe. And environmental damage continues unabated, with rising climate volatility belying claims that we can experience sustained and broad based prosperity without major changes in the global economy.

A key part of this problem – and one that hasn’t been adequately explored – is the economics profession.  Read more…

Destroying the lair of the budget-balancing cretins

May 13, 2013 2 comments

from Dean Baker

By now almost everyone knows of the famous Excel spreadsheet error by Harvard professors Carmen Reinhart and Ken Rogoff. It turns out that the main conclusions from their paper warning of the risks of high public sector debt were driven by miscalculations.

When the data are entered correctly, this hugely influential paper can no longer be used to argue that the United States or other wealthy countries need fear a large growth penalty by running deficits now. There is no obvious reason that governments can’t increase spending on infrastructure, research, education and other services that will both directly improve people’s lives and foster future growth.

With the advocates of austerity on the run this is a great time to pursue the attack. The public should understand that the often expressed concerns about long-term growth, the future, and the well-being of our children are simple fig-leafs for inhumane policies that deny people (a.k.a. the parents of our children) work and redistribute income upward. Read more…

Economic Thought: Special Issue on Ethics and Economics

Economic Thought - History, Philosophy, and Methodology
An open access, open peer review journal from the World Economics Association
Vol 2, No.1, 2013 – Special Issue on Ethics and Economics

Download issue in full (PDF)

Ontological   Commitments of Ethics and Economics

Karey Harrison

Abstract Download   PDF
Codes of Ethics   for Economists: A Pluralist View

Sheila C Dow

Abstract Download   PDF
No Ethical Issues   in Economics?

Stuart Birks

Abstract Download   PDF
Professional   Economic Ethics: Why Heterodox Economists Should Care

George   DeMartino

Abstract Download   PDF
And the Real   Butchers, Brewers and Bakers? Towards the Integration of Ethics and Economics

Riccardo   Baldissone

Abstract Download   PDF

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Error Correction and Ethics

April 23, 2013 15 comments

from Peter Radford

You probably have missed it, but there is a major furor within the economics profession concerning the findings of an academic paper written by Carmen Reinhart and Kenneth Rogoff in 2010. The profession issues a torrent of papers annually, most of which remain scarcely read and massively under-appreciated. Probably deservedly so since the sole objective of most is to meet the check-box requirement of publication that dominates academia. This desperation to publish to build reputation and to demonstrate mastery of the subject to a determinedly self-referential peer group is one of the causes of the rapid decline within economics: it encourages ever more fragmentation of the subject into ever less relevant sub-disciplines, and has resulted in a near total elimination of a common understanding – or common memory – of its development.

It has also produced sloppiness.

The R-R paper has now become a cause-celebre of such sloppiness.

This would not normally be worthy of passing along to a broader audience – who cares what academic economists write after all? – were it not for the particular topic that R-R covered.  Read more…

Standard & Poor’s

February 6, 2013 Leave a comment

from Peter Radford

It is good news that Standard & Poor’s is being sued by the government. S&P was complicit in the market rigging that led us to the bubble and the destruction of a boatload of wealth. It has escaped, thus far, any serious damage from its involvement in the creation of crisis and deserves to be taken down a peg or two. The amount of damages being sought is roughly equivalent to one year’s income of S&P’s parent company McGraw-Hill. That’s not enough to put the company out of business, but it is noticeable.

Anyone who is committed to a free market system will applaud the suit. Market rigging is about as serious a problem as can be imagined in a free market. Read more…

Categories: ethics, financial crisis

Wall Street speculation tax: a way to address corruption

July 11, 2012 4 comments

from Dean Baker

Over the past week, the business news has been filled with stories about major British banks manipulating the LIBOR rate. While these stories are undoubtedly confusing to most of the public, which is not generally familiar with the intricacies of different interest rate indexes, the basic story is fairly simple: Big banks were caught lying about interest rates in order to make big profits.

For the most part the victims were other high-rollers who were taking the other side of bets on complex financial derivatives. However there were also pension funds and even governmental units such as school districts and park services that were persuaded by their financial advisers to get into this high-stakes game. These folks were among those who lost because of the LIBOR liars.

A Fundamental Problem  Read more…

Categories: ethics

Bain Bashing – The Folly of Modern Business Theory

July 9, 2012 5 comments

from Peter Radford

We are entering the season of Bain bashing. Rightly so too. Romney’s long association with Bain and its activities, and his reliance on his business experience as a primary quality for election as president, bring Bain into focus. Its way of doing business, and its view of the world now need scrutiny because of the Romney connection. But I would suggest, they need scrutiny anyway. For Bain is just another of the very many manifestations of the post Reagan style of capitalism that pervades our economy. So its beliefs, its methods, and its results stand as exemplars of that era. Since that era just produced an economic depression, a great gulf in incomes, inequality, and rampant banking errors we are justified at offering a critique. If we indict Bain, we indict Romney. So let the Bain bashing commence. Read more…

Categories: ethics

A Reply: Economics and Ethics

June 7, 2012 8 comments

from Peter Radford

A correspondent of mine suggests we need to define both economics and ethics better if we are to resolve my ongoing angst with the state of the two combined.

This is true.

Ethics is, I think, well defined. The literature is full of notions of ethics and its evolution. Behavior that was once ethical is no longer so. Behavior that was once unethical is now acceptable. Clearly ethics is a relative and socially determined concept with changing views altering where its boundaries are. Currently there are behaviors falling outside those boundaries that economists seem blithely to continue to accept. This I attribute to the general out of date nature of the discipline. Remember that economics has successfully sealed itself off from reality, other disciplines, and society at larger for a while now. Instead it has taken on board its own vision of society, its own view of human nature, and its own calculus of how people interact. This allows it to have its own ethical standards separate from those being developed in the outside world.

Thus economists can genuinely argue that competitive pressures will reduce the incidence of unethical behavior. After all they invoke those pressures to resolve practically every other social problem, so why not ethics? Those of us less convinced by the ubiquity and efficacy of market forces would prefer to see a more interventionist element to ethics – a set of rules perhaps – to establish boundaries of behavior.

This is problem enough. More problematic is defining what economics is at all. Read more…

Categories: ethics

Pay-to-play economists

from David Ruccio

In an excerpt from his new book, Predator Nation, Charles H. Ferguson, the director of Inside Job, describes how “significant portions of American academia have deteriorated into ‘pay to play’ activities.”

Academics on industry payrolls are now so numerous and powerful that they can often prevent universities, professional associations, and academic journals from adopting or enforcing strong conflict-of-interest policies. They also have a chilling, even dominant, effect on several areas of academic research and policy analysis.

The sale of academic “expertise” for the purpose of influencing government policy, the courts, and public opinion is now a multibillion-dollar business. Academic, legal, regulatory, and policy consulting in economics, finance, and regulation is dominated by a half dozen consulting firms, several speakers’ bureaus, and various industry lobbying groups that maintain large networks of academics for hire specifically for the purpose of advocating industry interests in policy and regulatory debates.

He illustrates his argument with two examples, both economists: one a Republican (R. Glenn Hubbard), the other a Democrat (Larry Summers). Read more…

Libertarian Chaos

May 18, 2012 56 comments

from Peter Radford

There’s not much to say. After all the brinkmanship and game playing over the debt limit last year, and after being ridiculed by pretty much everyone, the Republicans are back at it. In an election year and with last year’s plunge in the polls as evidence that voters just don’t agree with their tactics.

What am I missing?

Apparently nothing.

The Republican extremist caucus in the House is setting its eyes on another confrontation with Obama over the debt ceiling. They want another deal. This after reneging on the last deal only a few days ago.

Are they kidding?

No they’re just extremists. Read more…

Academic Spring: phase two

from Edward Fullbrook

In case you have not been watching this Spring’s coming, since the spectacular Harvard development of two weeks ago, another large tree, the UK government, has bloomed.  Its Minister of State for Universities and Science announced last week that beginning in the near future all UK publicly funded academic research will be available on the Web free of charge to anyone anywhere in the world.  This is not a politician’s pipe dream; Jimmy Wales, the co-founder of Wikipedia, has already been hired to set it up. 

In effect, the right-of-centre government minister said enough is enough, that this is a business model too odious to be tolerated.  No longer will The Big Five (Elsevier, Wiley, Springer, Sage and Francis and Taylor) be allowed to stop society from freely accessing research funded by the UK taxpayer. 

What, when combined with Harvard’s, are the implications of this new initiative?   Six points come to mind. Read more…

Harvard University urges faculty members not to publish in or serve paywall journals

April 25, 2012 1 comment

from Edward Fullbrook

7 May, Academic Spring: phase two

The world campaign to stop the annual siphoning of billions of dollars of taxpayer and charitable funds from research and education into the coffers of Elsevier, Springer and Wiley reached a major threshold yesterday.      

A memo from Harvard‘s faculty advisory council to the university’s 2,100 teaching and research staff called upon them for immediate action.  It listed the following points:  Read more…

Categories: economic journals, ethics

WEA conference “Economics in Society: The Ethical Dimension” has begun (list of papers)

March 5, 2012 1 comment

from Edward Fullbrook

The World Economics Association’s first online conference “Economics in Society: The Ethical Dimension begins today. The first batch of papers has been posted, and discussion on them is now open.  The conference will run for one month, with its 24 papers being released in groups over the first week.  

If you go to the conference site and register by leaving your email address, you will be notified each time a new group of papers is posted and opened for discussion.  Similarly, you may sign up to be notified each time a new comment appears on a particular paper or group of papers.  And of course you are encouraged to participate in what is an important and long overdue public discussion.

The conference organizers Peter Radford, Alan Freeman and Grazia Iletto-Gillies have assembled the papers from contributors from around the globe.  The conference is designed to encourage economists to reconnect with the ever-present ethical dimensions of economics ignored and forgotten until today by the economics establishment.  Among other issues, the conference will address the ethical questions concerning the causal role played by the economics profession in the Financial Crisis and ethical dimensions regarding North-South economic relations.      

The group of papers posted today is as follows: Read more…

Economists: A Profession at Sea

January 19, 2012 7 comments

from Edward Fullbrook

This week’s Time magazine, of all places, has a splendid hard-hitting longish article by Robert Johnson (Institute for New Economic Thinking).  It includes an acknowledgement that a prestigious segment of the profession has been financially corrupted.  Here is some of the article followed by a link to the remainder.

Economists: A Profession at Sea

How to keep economists from missing the next financial crisis.

By Robert Johnson

After the financial crisis of 2008, the Queen of England asked economists, “Why did no one see the credit crunch coming?” Three years later, a group of Harvard under­graduate students walked out of introductory economics and wrote, “Today, we are walking out of your class, ­Economics 101, in order to express our discontent with the bias inherent in this introductory economics course. We are deeply concerned about the way that this bias affects students, the University, and our greater society.”

What has happened? Rebellion from both above and below suggests that economists, who were recently at the core of power and social leadership in our society, are no longer trusted. Not long ago, the principal theories of economics appeared to be the secular religion of society. Today, economics is a discipline in disrepute. Read more…

World Economics Association – Two announcements

The WEA’s forum for the open review of proposed articles for the World Economics Journal and for Economic Thought is now open. It is located at http://discussion.worldeconomicsassociation.org/. 19 submissions have been posted so far. You are encouraged to read and comment on papers that interest you.

The WEA’s first online conference – “ Economics in Society: The Ethical Dimension ” – is now set to begin on March 1st. The cut-off date for submissions (a wide diversity of papers has already been received) is February 19th. For details, go to http://weaethicsconference.wordpress.com/. Leave your email address and you will be kept informed.

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