DESCRIPTION: This book will focus on the interaction between ethics and economics, both in economic theory and economic policy. There are three ways in which ethics are important in economics: 1. Economists have ethical values that help shape the way they do economics. 2. Economic actors have ethical values that help shape their behavior. 3. Economic institutions and policies impact people differentially and thus ethical evaluations must be applied in addition to economic evaluations.

PART I: ECONOMISTS, VALUE JUDGMENTS AND ECONOMIC THEORY

Economists, as persons, bring a viewpoint with them that structures the questions asked, the methods, the evidence, the answers deemed acceptable. Is this merely Schumpeter's "pre-analytic vision" or does it lead to the value permeation of theory? If there is no objective access to the "real" world an economist is forced to see that world through the lenses of theory. Does that mean "facts" are theory laden? And value laden? What would this mean for economic theory?

A. INTRODUCTION

Jerry Evensky, "Ethics and the Invisible Hand," Journal of Economic Perspectives, Vol. 7, No. 2 (Spring 1993), pp. 197-205.

B. THE VALUE NEUTRALITY DEBATE

Charles K. Wilber and Roland Hoksbergen, "Ethical Values and Economic Theory: A Survey," Religious Studies Review, 12:314 (July/October, 1986), pp. 205-214.

Samuel C. Weston, "Toward a Better Understanding of the Positive/Normative Distinction in Economics," Economics and Philosophy, Vol. 10, No. 1 (April 1994), pp. 1-17.

C. EXPERIMENTAL EVIDENCE

Robert H. Frank, Thomas Gilovich, and Denis T. Regan, "Does Studying Economics Inhibit Cooperation?", Journal of Economic Perspectives, Vol. 7, No. 2 (Spring 1993), pp. 159-171.

PART II: RATIONALITY, ETHICS AND THE BEHAVIOR OF ECONOMIC AGENTS

All evidence indicates that economic actors (consumers, workers, firms) act out of more than calculated self-interest. Thus the assumption of rationality may be insufficient. People's behavior is influenced by many things including ethical norms. What impact does this have upon the ability of economic theory to predict outcomes of economic actions? In addition, given imperfect information actors might be tempted into strategic behavior that will result in sub-optimal outcomes. Morally constrained behavior might reduce that opportunism.

A. HUMAN BEHAVIOR: THE PROBLEM AND THE EVIDENCE

Jon Elster, "Selfishness and Altruism, in Jane J. Mansbridge (ed.), Beyond Self-Interest (University of Chicage Press, 1990), pp. 44-52.

B. IMPERFECT INFORMATION AND STRATEGIC BEHAVIOR

Robin M. Dawes and Richard H. Thaler, "Cooperation," Journal of Economic Perspectives, Vol. 2, No. 3 (Summer 1988), pp. 187-197.

Charles K. Wilber, "Trust, Moral Hazards and Social Economics: Incentives and the Organization of Work," in On the Condition of Labor and the Social Question One Hundred Years Later: Commerating the 100th Anniversary of Rerum Novarum and the Fifieth Anniversary of the Association for Social Economics, eds. Thomas O. Nitsch, Joseph M. Phillips, Jr. and Edward L. Fitzsimmons (Toronto Studies in Theology, Vol. 69, The Edwin Mellen Press, 1994), pp. 173-184.

C. BEHAVIOR, VALUES, AND ECONOMIC POLICY

Glenn C. Lowry, "God and the Ghetto," Wall Street Journal, February 25, 1993.

PART III: ETHICAL THEORIES AND THEORIES OF JUSTICE

In this section we will survey the major ethical theories that dominate discussion in philosophy and then attempt to see how they might help a decision maker in an organization-- business firm, government agency, et al. These ethical theories focus on guiding individual decision making. You could say that they are analogous to microeconomic theories. Theories of justice, which we study in the final section of this part, are analogous to macroeconomics. They are concerned with the way the economic system as a whole is organized and operated.

A. CONSEQUENTIALIST, DEONTOLOGICAL AND VIRTUE ETHICS

W. David Solomon, "Normative Ethics," prepared especially for this volume.

Amatai Etzioni, "Toward a Kantian Socio-Economics," Review of Social Economy, Vol. XLV, No. 1 (April 1987), pp. 37-47.

B. FEMINIST ETHICS

Virgina Held, "Feminist Transformations of Moral Theory," Philosophy and Phenomenological Research (1990), pp. 321-44.

C. ETHICS AND DECISION MAKING IN AN ORGANIZATION

Richard P. Nielsen, "Arendt's Action Philosophy and the Manager as Eichman, Richard III, Faust, or Institution Citizen," California Management Review, Vol. 26, No. 3, pp.191-201.

D. SOCIAL ETHICS AND THEORIES OF JUSTICE

Jim Sterba, "Social Justice," prepared especially for this volume.

PART IV: ECONOMIC INSTITUTIONS AND ETHICS

Institutions-- such as markets, property rights, the law-- have an impact on peoples welfare that needs to be evaluated in ethical terms. Some of these institutions are created by, or at least made possible by, legal and political structures. In other cases, "local" institutions such as draft boards make decisions that allocate burdens.

A. THE MORALITY OF MARKETS

Elizabeth Anderson, "The Ethical Limitations of the Market," Economics and Philosophy, Vol. 6, No. 2 (October 1990), pp. 179-205.

B. EXAMPLES

1. Intergenerational Responsibilities

Paul Streeten, "What Do We Owe the Future?," Resources Policy (March 1986), pp. 4-16.

2. Surrogate Motherhood

Elizabeth Anderson, "Is Women's Labor a Commodity?," Philosophy and Public Affairs, No. 19 (1990), pp. 71-92.

3. Discrimination

Stephen Shulman, "Metaphors of Discrimination: A Comparison of Gunnar Myrdal and Gary Becker," Review of Social Economy, Vol. L, No. 4 (Winter 1992), pp. 432-52.

4. Development Ethics

David A. Crocker,"Toward Development Ethics," World Development, Vol. 19, No. 4 (1991), pp. 457-83.

PART V: ECONOMIC POLICIES AND ETHICS

Economists use the concept of Pareto Optimality as their measuring rod when evaluating economic policies. This, in turn, is based on the notion that individual preferences are the ultimate measure of welfare. This has caused considerable controversy;, i.e., where do individual preferences come from and are some preferences unworthy. Cost-benefit analysis, a primary tool of policy evaluation, is based on the assumption that individual preferences are what count.

A. INDIVIDUAL PREFERENCES AND PARETO OPTIMALITY

Tyler Cowen, "The Scope and Limit of Preference Sovereignty," Economics and Philosophy, Vol. 9, No. 2 (October 1993), pp. 253-269.

B. COST BENEFIT ANALYSIS

Donald C. Hubin, "The Moral Justification of Benefit/Cost Analysis," Economics and Philosophy, Vol. 10, No. 2 (October 1994), pp. 169-194.