Ethic Theory Moral Prac DOI 10.1007/s10677-016-9708-7

Jonathan B. Wight: Ethics and Economics: An Introduction to Moral Frameworks Stanford, California, Stanford University Press, 2015, ISBN: 9780-8047-9453-4, 275 pages, €26,80 Andrea Klonschinski 1

Accepted: 22 February 2016 # Springer Science+Business Media Dordrecht 2016

Jonathan B. Wight’s book offers an overview of ethical theories and illustrates how important ethics is for economics. Wight’s main thesis is that incorporating ethical reasoning into economic analyses substantially improves the latter. In particular, he argues that adopting a pluralistic ethical account enriches the understanding of human behavior and leads to sounder policy advice, thus enhancing both positive and normative economics. Wight develops this claim in three steps. In part I of the book, Wight provides a primer to the subsequent chapters by delineating BWhy ethics matters^. Using different examples, Wight illustrates that markets work within a so-called Bmoral ecosystem^, i.e., they are based on culturally and historically determined moral values (4). To fathom this ethical environment, economists have to acknowledge that human beings are social creatures whose behavior is Bcomplex and contradictory: sometimes selfish, sometimes altruistic, and sometimes just^ (5). While ethics can improve economic analysis of behavior, sticking to one of the three basic ethical frameworks—focusing on outcome, duties or virtues—will not do; a claim which is buttressed by considering each framework in turn. First, Wight presents consequentialist theories. Beside classical utilitarianism, economics is also based on a consequentialist framework in so far as it focuses on maximizing the satisfaction of preferences (23). Second, rule- or duty-based ethics—e.g. Kant’s categorical imperative—evaluate actions in terms of whether they adhere to a certain rule or respect certain rights. Finally, virtue ethics focuses on the agent’s character and his motives. Considering these approaches critically, Wight avers that attention Bto all three ethical approaches is desirable and necessary because no one system is likely to work adequately on its own^ (56). Part II deals with BEvaluating the Economy^ and explores the notions of welfare and efficiency, the account of well-being as preference satisfaction, and Pareto efficiency and cost-

* Andrea Klonschinski [email protected]

1

University of Regensburg, Universitätsstraße 31, 93053 Regensburg, Germany

A. Klonschinski

benefit analysis (CBA). Delineating the basics of microeconomics, Wight illustrates the ethical attractiveness of the economists’ account of free markets by pointing out that in the market equilibrium, all voluntary exchanges are realized, so that no one can be made better off without making anybody worse off. Hence, this situation satisfies the conditions for Pareto efficiency. In the course of considering the potential Pareto criterion and CBA, Wight goes beyond a mere introduction to applied welfare economics and Braises a red flag of warning^ about CBA’s application by arguing that its legitimacy depends on the Bexistence and use of institutions for safeguarding basic human rights and liberties through due processes^ (89). The section closes with a critical discussion of the theory of welfare as preference satisfaction. Part III starts with discussing topics at the intersection of ethics and economics such as the moral limits to markets and the recent financial crisis. A thread running through these chapters is the critique of the narrow account of human nature held by most economists. Wight states that markets are rejected when they Bdegrade intrinsic values in a community^ (124) and are perceived as Bbeing inherently destructive of moral character^ (130). In addition, experiments show that individuals do not act in keeping with their own self-interest, but are heavily influenced by social norms. The last three chapters turn to the subject of economic justice. Wight distinguishes justice as fair processes (procedural justice), justice as fair outcome (distributive justice), and justice in terms of equality of opportunities, incorporating both procedural and distributive elements. He reviews some central theories of justice such as John Rawls’ account of justice as fairness and Amartya Sen’s capability approach. According to Wight, a pluralist approach to economics can gain insights from all these approaches. The final chapter elaborates the book’s central thesis that economics can be improved by adopting ethical pluralism, whereby pluralism is defined Bas some degree of acceptance of two or more valid values, or two or more valid principles, that pertain to the same or overlapping domains of reality and that cannot be reduced to a single value or principle^ (210). It Bentails the recognition that multiple ethical frameworks can help explain the world and inform decision makers^ (ibid.). As an example, Wight states that virtuous habits like self-control are required for adhering to rules, while following rules in turn lowers transaction costs, leading to better outcomes. A plea for ethical pluralism is not a plea for Banything goes^, though; BRather, it is the understanding of, and commitment to, principles and virtuous habits on which much economic activity relies^ (239). Wight has written a very readable and, not least due to the use of illustrative examples and fictional dialogues, highly accessible introduction to ethics in economics for economists and students of economics. The book is apt to enhance critical thinking, thus providing Ba preparation for tackling complex, diverse, and changing problems in real-world settings^ (4). Particularly in part II of the book, Wight does a very good job in uncovering the ethical assumptions underlying economic concepts and theories. Especially noteworthy is his perspective on moral norms as basic institutions in which economic processes and theories are embedded. This is particularly true when it comes to efficiency, which Bcan be judged a good outcome only if there are in place complementary institutions that enforce process rules about not harming others^ (227). However, Wight’s understanding of ethical pluralism remains conceptually vague and ultimately unconvincing. While his categorization of ethical frameworks according to their primary focus on outcomes, rules, and virtues is warranted for an introductory textbook, he puts up strawmen by assuming that the different theories only pay attention to one element of this triad. Utilitarianism, to give an example, certainly incorporates rules, namely, the rule to act so as to maximize pleasure. Likewise, it is based on the virtue of showing equal regard to

Ethics and Economics: An Introduction to Moral Frameworks

the pleasure of others as to one’s own. Beyond that, so-called consequentializers have been attempting to incorporate any deontic verdicts whatsoever into consequentialist theories (Portmore 2007). On the other hand, a non-consequentialist does not ignore outcomes completely, as the duty or virtue of beneficence illustrates (Ross 1930; Foot 1985). Although the three frameworks to some extent all take actions, outcomes, and character into account and try to systematize them into a coherent whole, and although they can all lead to the same moral judgment in certain cases, this is not to say that they can be consistently combined with each other. To give an example, in health care resource allocation, the consequentialist aim of achieving best outcome in terms of maximizing health is fundamentally at odds with giving everyone an equal chance of receiving treatment. One can, of course, switch the Bframework^ from one situation to another—this is not pluralism, but inconsistency, though. In fact, some of Wight’s own examples do not buttress ethical pluralism, as his considerations of CBA and efficiency illustrate. If the latter is only a legitimate goal within the realm of nonconsequentialist institutions guaranteeing basic human rights and liberties, the author clearly endorses a non-consequentialist, rule-based ethic. To Wight’s credit, it should be noted that he explicitly adopts a Bpragmatic account to ethics in economics^ (55). Considered against this background, the conceptual critique above may seem immoderate. As a pragmatic account, the book certainly achieves its aim, provides a valuable contribution to heterodox economics, and is especially recommended to students of economics.

References Foot P (1985/1988) Utilitarianism and the virtues. In: Scheffler S (ed) (1988) Consequentialism and its critics. Oxford University Press, Oxford, pp 224–242 Portmore D (2007) Consequentializing moral theories. Pac Philos Q 88:39–73 Ross WD (1930/2002) The right and the good. In: Stratton-Lake P (ed). Oxford University Press, Oxford