Ethics and Economics (PHIL 364.001)

How free should the market be? Is there a reliable mechanism for converting public preferences into economic policy? Are public preferences on economic policy issues sufficiently informed by knowledge of market mechanisms? Consider the latter question first. The public generally believes that rent control is good because it protects renters, but economists argue that rent control hurts rather than helps renters, especially the poorest among them. If economists are right, then we have an instance of public preferences not sufficiently informed by knowledge of markets. Or take the question about converting public preferences into economic policy. There is a growing suspicion among large segments of the population that special interest groups are getting increasingly more influential and that government power is being used for private gain. If that is so, then economic policy is being shaped by factors other than public preferences. Is that so, and if yes, is there a way to improve the status quo? These are some of the questions we will address in this course. More generally, we will examine the complex interrelations between ethics and economics.

Ethics is the study of the right and the good. Economics is the study of the production, consumption, and distribution of goods and services, or the way “markets work”. Traditionally, moral philosophers, with some notable exceptions such as Adam Smith, have kept discussion of philosophical questions concerning the right and the good separate from analysis of the nature of markets; economists, on the other hand, have often striven for a “value-free” analysis of market mechanisms. As the above questions demonstrate, however, ethics and economics unavoidably intersect. There is no value-free analysis of markets (for instance, if one defends free markets on the ground that they are efficient, one implicitly endorses the value of efficiency and, perhaps, places that value above other values); and some of the most important ethical questions, such as “What is justice?” have correlates at the intersection of ethics and economics, thus, one can ask, “What is economic justice?” Such questions are both theoretically challenging and of enormous practical import. There is hardly a more encompassing societal structure than the economic structure. Even the most ungregarious introvert who avoids social life as much as possible and elects to minimize interaction with other people is bound to enter economic relations with others. As are all of us – we may or may not belong to a political association, a church, or a book club, but each one of us is bound to become party to a multitude of economic transactions daily: we are employers and employees, renters and landlords, buyers and sellers of goods and services. Our goal in this course will be to put philosophical insight to bear in understanding the nature of these transactions and their ethical implications as well as to use knowledge of market mechanisms in proposing informed solutions to ethical problems which arise in connection with the economic structure of society.

Recommended preparation: at least one course in ethics (PHIL 160, 163, or 170) or one course in economics.

Cole Mitchell’s webpage