The American vice-president, among others, is no great fan of global trade. He has criticized Margaret Thatcher, Milton Friedman, and the Wall Street Journal editorial board, suggesting that economic prosperity and growth might be overrated if they require America to be deeply enmeshed in global markets.
Postliberals as a group have made no secret of the fact that they view mainstream economics as inhumane with its focus on consumption and GDP growth. Sometimes their arguments are questionable, but it’s true that modern economics has a way of embracing a flat, utilitarian view of the world, sometimes pushing that view into realms where it doesn’t belong.
But should economists incorporate concerns about virtue, ethics, and happiness into their economic theory? Yes, but this question is more difficult than it appears. The issue is not whether ethics matter, but whether ethics should shape economic models themselves or merely how those models are applied.
Modern economics prizes value-neutrality. Economists fear that introducing moral judgments will undermine foundational concepts like the positive-normative distinction, subjective value, and rational choice theory. After all, natural economic laws operate regardless of personal virtue: demand curves slope downward, incentives drive behavior, and binding price ceilings generate shortages. Keynesians, Austrians, and Supply Siders (as well as utilitarians, virtue ethicists, and Kantians) recognize this.
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Individual ethics, aesthetics, and other values should manifest in individual behavior if people are unconstrained by an imposed value system.
All these statists are trying to do is impose their values on others who don’t share them.
I think even free marketeers need to be careful about how they speak of the normative implications of economics
I know too many people who mistakenly think that economists have a fully materialist and consumption oriented worldview. It's very common, and it naturally leads them to react against economic thinking, because they haven't understood the perspective.
I agree with that entirely.
What’s the best way to communicate that we’re agnostic about which specific things people should believe, while valuing that they believe them?
Probably starts in the classroom... to repeatedly emphasize the moral perspective behind economic welfare analysis. Remind the students why we're leaving everything but economic efficiency out--not because we don't care, but because we want to approach it from a minimalist mindset)
We also allow it to be baked in, which can seem like overlooking it.
Part of demand can be ethical considerations, as can willingness to produce certain goods.
Should we do more morality based examples?
I actually had a convo with a student about it at lecture just yesterday.
He was asking about how realistic is a utility function where only consumption of the good enters into it.
I had to explain how the beauty of the framework is we can expand the utility function to account for many other priorities of the decision maker, including ethical commitments.
But you're right that I don't have any good examples. I did tell them that the simple model is hard enough to solve without adding all the complexity, so we have to learn how to solve the most basic version first.
The best example I can think of off the top of my head is about how prevalent racism has to be among employers before it can actually have a large impact on wages.
I do think it's fair to criticize our profession in the sense that: yes, it's possible to model ethical concerns; and yes, we acknowledge their legitimacy; but how often do we really try to take ethics seriously in our models? Almost never in practice. I didn't learn any such models in grad school... although I did have one prof whose research was on identity. But, even in her class, it was just classical information economics models.