Table of Contents

Handbook of Economics and Ethics

Handbook of Economics and Ethics

Elgar original reference

Edited by Jan Peil and Irene van Staveren

The Handbook of Economics and Ethics portrays an understanding of economic methodology in which facts and values, though distinct, are closely interconnected in a variety of ways. From theory building to data collection, and from modelling to policy evaluation, this encyclopaedic Handbook is at the intersection of economics and ethics.

Introduction

Edited by Jan Peil and Irene van Staveren

Subjects: economics and finance, behavioural and experimental economics, history of economic thought

Extract

Irene van Staveren and Jan Peil Ethics and economics: the revival of economics as a moral science From Adam Smith until John Maynard Keynes economics was widely understood as a moral science. Smith was Professor of Moral Philosophy in Glasgow while Keynes explicitly recognized economics as a moral science throughout his work. During the twentieth century, however, the centrality of neoclassical economics came to marginalize the ethical dimensions of economics. The stronghold of positivism over the discipline, particularly since Lionel Robbins’s influential claim in 1932 that welfare economics should not compare levels of utility between individuals but leave that to politics, shifted ethical concerns to the equity side of the Paretian welfare criterion, which portrays efficiency and equity as trade-offs. This heritage leaves us today with a strong belief across the discipline that there are positive economics and normative economics and that the two are not only distinct but also each other’s opposite. Recently, however, the dichotomy between positive and normative economics that is portrayed in textbooks, models and empirical analyses has come under increasing attack. First, critical economists and philosophers challenge the fact/value dichotomy underlying modern science, including economics (Walsh 2000, 2003; Putnam 2002, 2003; Putnam and Walsh 2007). Putnam, a philosopher, argues ‘that the whole idea of dividing up a thick ethical concept, such as cruelty or bravery, into a “purely descriptive part” (one which can be fully characterized in “value-free language”) and a “purely evaluative art” is a philosopher’s fantasy’ (Putnam 2003, p. 396). He continues more...