chapter
to argue that the Pareto standard, considered unassailable by most economists and philosophers, is morally questionable due to its lack of respect for the dignity of autonomous agents, given its reliance in practice on hypothetical rather than actual consent. In “Identity and Individual Economic Agents: A Narrative Approach”, John B. Davis adds to his rich work on identity and the economic individual by emphasizing the importance of agency to ethical decision-making, incorporating the work of contemporary moral philosopher Christine Korsgaard on the “reflective structure of consciousness”. Appropriate for the 250 anniversary of the publication of The Theory of Moral Sentiments, Jonathan Wight looks at Adam Smith’s moral philosophy in “Adam Smith on Instincts, Affection, and Informal Learning: Proximate Mechanisms in Multilevel Selection”. Wight argues that Smith’s work on natural instincts (such as emotions and imagination) can contribute to current discussions of multilevel section, informal learning, and human and social capital, and at the same time can provide a more accurate picture of Smith’s “invisible hand” at work. The last three chapters provide examples of applied ethics in economic analysis. First, Mozaffar Qizilbash’s “Two Views of Corruption and Democracy” discusses two opposing views of how democracy affects corruption. The pessimistic view, supported by neoclassical economics, holds that the egalitarianism of democracy will stimulate corruption because the majority want the benefits of state provisions and elected politicians will implement the necessary redistribution away from the losing minority. The optimistic view, put forward by Sen, contends that democracy tends to reduce self-interest and increase values of solidarity, in turn weakening tendencies toward rent-seeking and free riding. Qizilbash finds the optimistic view more compelling, but admits that Sen’s optimism needs some institutional backing. He suggests that some forms of corruption are undemocratic, and concludes that in the struggle against corruption, we need to strengthen democracy rather than give up on it. In “From ‘Hume’s Law’ to Problem- and Policy-Analysis for Human Development”, Des Gasper evaluates the humanist values underlying Sen’s (and related economists’) policy analysis. The central question underlying policy analysis is ‘how do and can people live?’, which, obviously, is an ethical question. The paper challenges Hume’s Law—“no ought can be derived from an is”—and refers to the work of pragmatist philosophers like John Dewey, who recognize that every map of reality is selective and cannot escape from our views and interests. For example, Gasper notes the limitations of the technical definition of “public goods” in neoclassical economics as non-rivalrous and non-excludable goods. Education and health care are often rivalrous and excludable, yet in many countries they are public goods because they are regarded as merit goods whose consumption has major positive externalities. Finally, Gasper suggests particular values that would improve policy analysis, such as realism above elegance of models, sufficiency above precision in data analysis, and human rights as a guiding force.
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to argue that the Pareto standard, considered unassailable by most economists and philosophers, is morally questionable due to its lack of respect for the dignity of autonomous agents, given its reliance in practice on hypothetical rather than actual consent. In “Identity and Individual Economic Agents: A Narrative Approach”, John B. Davis adds to his rich work on identity and the economic individual by emphasizing the importance of agency to ethical decision-making, incorporating the work of contemporary moral philosopher Christine Korsgaard on the “reflective structure of consciousness”.