Economics and Ethics

Ethical standards for a profession or business
Focus on personal conduct (Verhalten) / behaviour, ex: Business ethics, Product safety, truth of advertisement

Philosophical ethics applied to a particular subject area
Implications for social policies
How to use ethics to inform, Fainess of tax policies, social welfare

Economics: Study of the economic domain
Ethics: Study of morality
E and E: Study of morality in the economic domain

Codes of moral conduct or moral norms

Social norms: drive on the right (or left), elbows on the table (or off), tipping 18%?

Morality concerns moral norms: rules of fairness, honesty, protecting life

moral norms are a subset (Teilmenge) of social norms

Value judgements
philosophers ethics

claims that employ the words "should" or "ought" in a moral sense

Study of the actual beliefs of people about morality

empirical area of study

Description of economic activity

study of "is"

positive statement is about facts (can be false)

ex: a higher minimum wage will increase unemployment

Prescriptive economic analysis

study of "ought" or "should"

normative statement expresses a value judgement

ex: minimum wage should be raised

Normative economics must be consistent with values people actually hold
not the naturalistic fallacy: the claim is not that just any values are reasonably
Values must be shared by at least some people under some conditions

One cannot argue from descriptive statements to normative conclusions

ex: fact that aid to developing nations is insufficient does not mean that the poor should starve

Ought can not be derived from is

only scientific knowledge is considered legitimate, based on sensory expierience

1. Max Weber: Wertfreiheit: separation of social science from value judgements

2. Lional Robbins: Value neutrality in economics: economists should
- focus on despriptive analysis
- remain neutral among ends
 

Value neutrality is a value judgement itself, it claims economists should ignore value judgements

economists are called upon to recommend policies- requires some foundation in/ conection to values

morality of econimc agents influences their behaviour and economic outcoms

values are unavoidable

purely selfinterested economic agents

focus usually on efficiency and /or some complementary moral value

formal, theoretical models, sometimes linked to theories in moral philosophy, dominate this approach

involves axoimatic approach: formal, theoretical models, sometimes linked to mral philosophy

Ethics is an hazardous waste

If avoidance is impossible, wear at least heavy protection

Rests on very strong (i.e. unrealistic) assumptions that agents are: Selfinterested (seek only to max. their own material rewards) or rational (Behave according to a specific decission model)

studies behavior that conflicts with assumptions of traditional economics

uses experimental methods to examine econimc behavior

"Sitting in an armchair thinkung"
Aquire knowledge through introspection and reflection
No need to collect new information

some system of ethics applies universaly for similary situated individuals
Implication: If stealing and lying are wrong in one place or with one group, they are also wrong everywhere and for everyone

there are nor moral principles at all
Diametrically oppoesed to moral universalism

There are moral rulse but they differ across people and cultures
Ex. Birth control is widely considered immoral in Ireland, but moral in Japan

Two main concepts of ethics and ways if thinking about what should guide our behavior

Good: has to do withngoals and their achievments

Right: focuses on conformance to rules and duty
ex: do ot lie even if it has good results