Economists and the State

Economists and the State

What Went Wrong

Timothy P. Roth

Adam Smith is widely regarded as the ‘founder of modern economics’. The author shows, however, that Smith’s procedurally based, consequence-detached political economy, an approach shared by America’s Founders, finds no expression in the economist’s utilitarian, procedurally-detached theory of the state. This ‘wrong turn’ has meant that, if economists are ill-equipped to address an expanding federal enterprise in which utilitarian considerations trump the Smithian/Madisonian idea that means and ends must be morally and constitutionally constrained, they are also ineffectual bystanders as growing institutional skepticism, demands for ‘social justice’ and metastasizing rights claims threaten our self-governing republic.

Chapter 6: What went wrong

Timothy P. Roth

Subjects: economics and finance, political economy, public choice theory, politics and public policy, political economy, public choice


6.1 THE PUBLIC PHILOSOPHY OF MODERN AMERICA: RIGHTS, SOCIAL JUSTICE AND OTHER CONUNDRA The public philosophy of modern America, Ronald Dworkin’s liberalism (Section 4.4), is animated by its insistence that government has a duty to respect the individual’s fundamental right to equal treatment. Central to this paradigm is the idea that individuals possess natural rights, antecedent to civil society, as non-absolute trumps against welfarist calculations informed by external preferences (Waldron 1995b, p. 582). Consider, first, that however rights are construed, modern liberalism’s transcendental, autonomous self has no motive to respect institutions generally and rights in particular (Sections 4.2 and 4.3). If this means that modern liberalism is internally inconsistent, its ‘utilitarian connection’ compounds the problem. On the one hand, utilitarians cannot respect the moral force of rights. On the other hand, account should be taken of Jeremy Bentham’s ontological objection to rights generally, and to natural rights in particular. ‘The language of natural rights … “is from beginning to end so much flat assertion: it lays down as a fundamental and inviolable principle whatever is in dispute”’ (Waldron 1995b, p. 581).1 Bentham’s utilitarian objection notwithstanding, ‘the claim to “natural rights” has never been quite defeated’ (MacDonald [1947– 1948] 1995, p. 21). That said, it is recognized that the natural rights doctrine ‘has seemed particularly vulnerable to ethical skepticism’. As Jeremy Waldron has emphasized, ‘The idea of natural rights is seen as a particularly glaring example of the “Naturalistic Fallacy”, purporting to derive certain norms or evaluations from descriptive premises...

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