The Ethics and the Economics of Minimalist Government

The Ethics and the Economics of Minimalist Government

Timothy P. Roth

Because it is technically flawed and morally bankrupt, the author argues, the economist’s consequence-based, procedurally detached theory of the state has contributed to the growth of government. As part of the Kantian–Rawlsian contractarian project, this book seeks to return economics to its foundations in moral philosophy. Given the moral equivalence of persons, the greatest possible equal participation must be promoted, persons must be impartially treated and, because it is grounded in consequentialist social welfare theory (SWT), the economist’s theory of the state must be rejected. Ad hoc deployment of SWT has facilitated discriminatory rent seeking and contributed to larger government. In contrast, this book argues that equal political participation and a constitutional impartiality constraint minimize rent seeking, respect individual perceptions of the ‘public good’ and underwrite the legitimacy of government. Economists, moral philosophers and political scientists will find this book a unique contribution to the literature.

Chapter 1: A Prior Ethical Commitment

Timothy P. Roth

Subjects: economics and finance, public choice theory, public sector economics, politics and public policy, public choice


1.1 INTRODUCTION The protestations of many economists notwithstanding, economics is a moral science. The Adam Smith of An Inquiry Into The Nature and Causes of The Wealth of Nations was, after all, first the author of The Theory of Moral Sentiments. While the dominant image of Smith is that of an advocate of unfettered self-interest, in fact, the ‘invisible hand’ of Wealth was part and parcel of Smith’s concern with how conscience is formed (Tribe 1999, p. 627). A recurring theme is therefore how the market and other institutions might be structured so as to cultivate the human desire for the sympathetic approval of others. Central to this project is the idea that ‘the market’, the law and other formal and informal institutions can assist in the development of the ‘superior’ and ‘inferior’ virtues.1 In effect, the father of economics (Tribe 1999, p. 609) was, first and foremost, a moral philosopher. The emergence of institutionless, intendedly value-free neoclassical economic theory meant, inter alia, that many economists either lost sight of, ignored, or rejected the moral foundation of economics. Indeed, the view became prevalent that value-judgments and normative issues generally do not fall under the purview of scientific, positive economics. This view notwithstanding, it is relatively easy to show that social welfare theory – the theory which informs most economists’ approach to public policy appraisal – is, in fact, a hybrid moral theory (§2.1). Because it is consequentialist, it is a part of the body of goal-based moral theories. And, because it...

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