Introduction to the Handbook of Teaching Ethics to Economists

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1. Introduction to the Handbook of Teaching
Ethics to Economists
Ioana Negru, Craig Duckworth and Imko Meyenburg
Economics, originally a moral science, has become detached from its ethical mooring
(Backhouse et al., 2020; Boulding, 1969; Davis, 1991). An economic order is, from
a broader perspective, a moral order (Bowles, 2016; North, 1994) but this appears
to be of limited concern to the contemporary, mainline economist. Markets are, on
the dominant view, allocative devices with their own internal, morally neutral logic.
While personal and social values may be acknowledged, these are extraneous to the
market, the preserve of autonomous choice and incentive. In this morality-free zone
(Gauthier, 1987; Boatright, 1999) ethics has no place, except as an afterthought or
a pleasurable occupation for those who have the inclination.
The leading purpose of this Handbook is to challenge this view, and to encourage
economics instructors to reflect on the points of contact between their teaching and
the ethical dimensions of their discipline. A number of recent texts reflect height-
ened interest in the questions raised by this area of study. Prominent, is a call for
a professional economic ethics (DeMartino, 2011; DeMartino and McCloskey, 2016;
Dolfsma and Negru, 2019), that the economics profession pay greater attention to the
societal context of economic policy, the way it is implemented, and the theory that
underpins it (see also Stiglitz, 2019; Sen, 1999; Desai, 2015 who query the author-
itarianism implicit in the go-to, top down model of economic policy formation). Of
central ethical concern here are the significant harms that can emanate from policy
implementation, harms that are too little anticipated in the design of economic policy
(DeMartino, Chapter 3, this volume). A more democratic policy process than is usual
would likely be more sensitive to social and cultural context and be better able to
anticipate the behavioural reaction of the people affected. On this thesis, there may
be moral reasons not to forget that much economic analysis is a priori and is arguably
able to feign universal application only because of its grossly unrealistic assumptions
(Lawson, 2019; Mäki, 1994; Fullbrook, 2009). This is an important theme of recent
work in economics and ethics and frames much of the discussion in the present
volume.
An alternative theme is to be found in the work of Deirdre McCloskey (2016,
2010). Her study of market institutions and virtue looks favourably on competitive
markets and the capacity of economic theory to harness their potential (importantly
for technology and development). Drawing on a rich vein of pro-market thinking
(see, for instance, Hirschman, 1984; Sen, 1977), McCloskey views markets as
dependent on and generative of personal and civic virtues – honesty, transparency,
commitment and so on being the wellspring of mannered competition and inno-
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2 Handbook of teaching ethics to economists
vation. Carlota Perez (2019) points, similarly, to the creative capacity of markets
to navigate the ethics and economics of growth and sustainability; and Mariana
Mazzucato (2018) addresses the bases of economic value and the fair distribution
of the returns from innovation (see also Carney, 2021; Rajan, 2019). There are also
a number of vanguard encyclopaedic volumes in the field of economics and ethics
that include White (2019), White and van Staveren (2012) and Peil and van Staveren
(2009) (see also Fleurbaey, 2004). Earlier, landmark studies include Sen (1987),
Hausman and McPherson (1996); Farina et al. (1996); Broome (1999), White (2011),
White (2015), and Beckerman (2017); see also Wolff (2005).
There are, of course, a number of prestigious courses that incorporate classes
in economics and ethics worldwide. But if, as DeMartino and others suggest, it is
important for all economics professionals to appreciate the moral significance of
their discipline, then it is incumbent on lecturers to embed ethics more firmly in the
mainstream economics curriculum. This raises questions as to the ways in which
economics and ethics might combine in course content, questions which this text
provides an opportunity to explore.
Interest in ethics and economics reflects contemporary as well as more tradi-
tional concerns. A serious response to the move to decolonize the social and human
sciences, as it relates to economics, requires a reappraisal of its arguably Global
North orientation (Agunsoye et al., 2022). Viewing economics as applied ethics
and taking a particularist ethical approach, for example (Dancy, 1983; see also
Nussbaum, 2009; Caspary, 1991), would prioritize context over any presumed
universality of economic principles. Thus, reorienting economics around global
issues provides fertile ground for an exchange between ethics and economics, and
the issue dovetails with broader debates around identity, diversity, and inclusion as
they impact university curricula (Jansen, 2019; Groenewald, Chapter 7, this volume).
Other contemporary concerns include the way that global financial and health crises
have brought into relief multidimensional inequalities that economics ought, many
argue, to be alert to in its policy recommendations (e.g., Ruckert and Labonté, 2012;
Reddy, 2020); and there are other, perhaps more longstanding, dimensions to the
conversation between economics and ethics that it will be helpful to rehearse here to
set the stage for the chapters to come.
The development of economics as an independent discipline tracks the method-
ological shift that came with the objectification of nature and the conception of the
theorist as neutral examiner that emerged in the seventeenth and eighteenth centuries
(Wootton, 2015; McDowell, 1998). A key outgrowth of these developments was the
scientism of nineteenth-century social and human science. In a period that also saw
the rise of an interpretational approach to scientific understanding, with Vico, Weber,
Simmel and Dilthey (David, 2010), it was the positivism of Comte and Durkheim
that was embraced by economists (McCloskey, 1998, provides a fuller account of
modernist methodology). In work that was seminal in the development of economics
as a discipline Stanley Jevons and Léon Walras (Schabas, 1989) saw in the adoption
of natural scientific method an opportunity to study the competitive market as a deci-
sional mechanism, isolated from its socio-cultural and political setting (Boettke,
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Introduction 3
Chapter 2, this volume). But this methodological development also tracks the growth
of regulated markets as a central allocative device in emerging secular and politically
liberal societies. In Aristotle, and the quasi-religious work of medieval scholastics,
economic activity was viewed as inherently ethical (Backhouse, 2002; Rima, 2012).
But when Adam Smith wrote his account of the basis of societal wealth (Smith, 1776,
1759), the context was an intellectual environment in which competitive markets
were presumed a stage for autonomous decision, by consumers and business organ-
izations. Though the actual extent of personal autonomy in the burgeoning markets
of Smith’s days is a matter for dispute (see Wood, 2017; Polanyi, 1944), questions
around productivity, for example, have an instrumental dimension in Smith that
separates them from issues of political stability and equity. So, the separation of
ethics from economics understood as the study of societal choice per se is nascent
in Smith. On this quite standard interpretation, the separation of economics from
normative considerations, evident also in the French Physiocrats and the formalism
of David Ricardo (e.g., Rima, 2012), may be seen as a fine intellectual achievement.
With the later addition of a mathematically tractable model of agential choice (bor-
rowed largely from David Hume and Jeremy Bentham) pioneer, marginalist theorists
created a framework able to analyse economy as a decisional system, without norma-
tive obfuscation (for the development of homo economicus, Edgeworth (1881) and
Mill (1874) are also major, foundational contributions). But the sharp, conceptual
divide between positive and normative concerns in economics remains, as we have
seen, controversial. Particularly apposite is Bowles (2016) for whom the appetitive
conception of choice, so central to mainstream theory, is far from being a harmless
idealization. It encourages a reliance on incentives in public policy that crowds out
other, moral reasons for action – commitment, trust, and so on (see also Ostrom,
1991; Wight, Chapter 16 in this volume).
One strand in normative economics has been the attempt to base the choices of
a collective on individual preferences. Early attempts, in the old welfare economics
of Edgeworth, Pigou and Marshall met their end in Lionel Robbins’ trenchant rejec-
tion of utilitarian presumptions; specifically, the use of interpersonal comparisons of
utility in normative economic analysis (though Robbins expressed a more moderate
view later in his career; see Fleurbaey, 2004). During the 1930s and 1940s new welfare
economics (principally the Bergson social welfare function (1938), later refined by
Samuelson (1947)) attempted to provide a basis for moral judgement at the collective
level consistent with the understanding that the utility that individuals derive from
their preferred consumption is non-comparable. Arrow (1950, 1963), however, put
paid to the Bergson–Samuelson attempt to provide a consistent basis for collective
judgements in individual preferences. Though there are grounds for serious dispute
as to whether Arrow’s thesis actually undermines Bergson’s framework (Igersheim,
2019), his impossibility theorem challenges the very idea of normative economics.
Suffice it to say that Arrow’s theorem shows there is no way to derive a stable collec-
tive choice in a way that preserves the decisional authority of everyone affected (for
a more formal account see, for example, Sen, 2017; List, 2013).
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4 Handbook of teaching ethics to economists
Attempts to circumvent Arrow’s result constitute a large and technically sophis-
ticated body of literature, but it is literature that offers, arguably, only an attenuated
form of ethical enquiry. We may assume (with Arrow) that individual preferences
reflect personal values and assume that this is how the ethics gets in. However, as
inputs to the collective choice process, preferences manifest as choices, not articula-
tions, and as choices they cannot be interrogated or challenged, or their supporting
reasons exposed. This reduction of individual values to acts of choice is, arguably,
essential for the preservation of the positive-normative dualism so central a compo-
nent of economic orthodoxy. To attempt to incorporate values per se when making
choices for a collective is either unscientific (because it requires an attempt to settle
moral disagreement) or it constitutes moral and political philosophy and so stands
outside the realm of economics as a scientific discipline. What is left is a gaping
chasm between disciplines that engage with the issue of collective agreement in the
face of plural values and attempt to provide theoretical justification for public policy
(principally normative political theory) and an economics discipline that appears
entirely free of such concerns (Atkinson, 2001).
It is important to qualify this. First, it is observed in Backhouse et al. (2020) that
economists commonly combine a reductive analytical stance with a broader intellec-
tual concern for ethics (notwithstanding McCloskey, 1998: Ch. 9). The normative
aspects of economic issues are daily fodder for the commentariat. Second, there is
a strand in normative economics (van Aaken et al., 2004; Dryzek and List, 2003) that
draws on the idea of deliberative democracy as a corrective to the Arrovian approach.
Public deliberation can, on this view, reduce disagreement and so align preferences
to the extent that stable collective choice is possible while remaining within Arrow’s
aggregative framework. This approach is reminiscent of John Dewey’s conception
of the role of social science in democratic polities. On this conception, the role of
economic analysis is not to provide determinate policy recommendations but to
contribute to more broadly based public debate (Dewey, 1927; Colander, 2015, and
this volume).
Economics and ethics are each complex disciplines. How they interrelate is of
great theoretical interest and practical consequence. The chapters in this volume
bring the two into conversation in ways that reflect this complexity and offer ways in
which the conversation may inform the way that economics is taught, and where and
how ethics might appear in the economics curriculum.
In the chapters that follow, Peter J. Boettke, in ‘The fate of moral philosophy
in an age of economic scientism’, notes what he sees as the excessive scientism of
mainstream economics, and calls for the human to be put back at the centre of the
discipline. Economics should, he argues, be viewed as a route to understanding rather
than control. He envisions economics as part of democratic policy conversation and
for this its connections to philosophy, history and the broader humanities should be
revived. Scientism, he argues, kills science and our best hope for the discipline is to
move in the direction of the grand tradition of political economy as practised from
Adam Smith to J.S. Mill. In making this move, economics would be a philosophical
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Introduction 5
science with the goal of achieving social understanding and would eschew the pursuit
of economics as an engineering science that seeks social control.
George DeMartino, in ‘Teaching economic harm to economists, in three diagrams’,
highlights what he calls the tragedy of economics, its tendency to cause harm even as
it tries to do good. Indeed, economists necessarily cause harm as they promote social
betterment. But rather than confront the problem responsibly, standard economics
training trivializes the harms that befall individuals and their communities as a con-
sequence of economic policy that economists advocate. Unlike other professions
that induce harm, standard welfare economics embraces what DeMartino refers to
as ‘moral geometry’ that reduces very complex moral problems to welfarist decision
rules involving simple mathematical problems. These include Kaldor-Hicks, the
associated use of cost–benefit analysis and social welfare functions (SWFs). These
decision rules are appropriate only in cases where all harms are reparable through
monetary compensation. But they are inappropriate in very many of the cases where
they are in fact employed. The latter includes cases where there are irreparable
harms – such as the loss of irreplaceable goods – and where harms occur that though
potentially reparable, are not reparable through compensation. In cases like these,
moral geometry fails. For instance, trade liberalization induces increased morbidity,
mortality, and addiction; domestic and other forms of violence; social isolation, and
a loss of self-respect and political agency – to name just some of the harms that befall
communities affected by dis-investment following liberalization. Many of these
harms are irreparable, and non-compensable. And yet, trade liberalization continues
to be advocated by trade economists on welfare grounds, relying on moral geometry.
Economists must be trained, DeMartino argues, to recognize that very many of the
policy initiatives they have reason to advocate are not appropriately justified by
moral geometry.
In ‘Is it ethical to teach economics without ecological economics in the context of
a climate emergency?’, Jamie Morgan argues that not only must economics teaching
address the issue of climate change, it should be recognized that its orthodox models
have rationalized the consumption and growth that have contributed to the crisis.
What is required, he says, is a differently founded economics discipline, one that
draws on the conceptions and values that underpin ecological economics. Indeed,
Morgan argues, it is unethical to teach economics without ecological economics
because we are in a climate emergency. He begins by distinguishing the ‘right thing
to do’ from the more nuanced issue of knowing or answering the question, ‘What is
the right thing to do?’. He then moves onto the significance of this for economics
in the context of climate emergency, before distinguishing between ecological eco-
nomics and mainstream and environmental economics as a precursor to addressing
the issue for economics of, ‘What is the right thing to do, to help others do the right
thing?’
In ‘Accounting as applied ethics’, Wilfred Dolfsma argues that there are notable
parallels between the different strands within ethics on the one hand, and the disci-
pline of accounting on the other hand that, in teaching, can be drawn upon to enhance
students’ understanding of the latter. Accounting, part of economics, draws on utili-
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6 Handbook of teaching ethics to economists
tarian ethics, but not solely so. Accounting, in addition, draws on deontological and
communitarian strands in ethics. The chapter suggests that the teaching of accounting
– especially to non-economists – would benefit substantially from highlighting and
developing these parallels with ethics.
Dennis Badeen in ‘Aristotle, Marx, and the ethical implications of the systemic
critique of capitalism’ elucidates the ethical implications of Marx’s critique of the
system of capital. Aristotle’s Virtue Ethics and critique of economics as chrematis-
tics are shown to be important foundations for understanding Marx’s ethical system.
An Aristotelian informed interpretation of Marxist economics is developed, and its
ethical implications illuminated. How students could benefit from studying Marxist
economics and some learning activities are also indicated.
Michelle Meixieira Groenewald, in ‘Is it ethical to teach pluralist economics
curricula, particularly in the Global South?’, argues that this is indeed the case. She
notes that over the past few decades a large number of contributions have been made
to justify and legitimize the importance of pluralism in economics. Building upon
these important debates has encouraged vital reformation of economics curricula and
broader pedagogical practices. Her chapter contributes to the pedagogical discourse
by putting forward the proposition that it is ethical to teach economics curricula that
are pluralist. It is argued that this is important everywhere, and particularly so in the
Global South, across various underlying ethical frameworks. Whether one considers
this from a utilitarian, deontological or virtue ethics framework, ethical pluralism
can allow for all three of these to be applied as a lens of analysis to guide us in the
pursuit of teaching pluralist economics curricula. It is demonstrated that a pluralist
curriculum can give students, lecturers, and society greater utility. From a deontolog-
ical perspective, it is the duty of lecturers to foster epistemic freedom. Drawing from
a virtue ethics framework, pluralist pedagogy requires at the very least, the virtue of
tolerance, whilst the virtues of African ethics emphasize the importance of commu-
nity which could be applied to a pluralist pursuit of economics curricula reform. The
chapter concludes that these arguments are particularly important in the context of
the current students in the Global South who will become future economists. In order
to better grapple with damaging dominant ideas often coming from the Global North,
students should be exposed to a plurality of economic ideas, to be better equipped to
push back on sometimes narrow and insular views on economic policy.
In ‘Articulating the social role of the economist: a synthesis of Alfred North
Whitehead’s philosophy of education and John Maynard Keynes’s economics’,
Dennis Badeen explores what we learn from Whitehead for the teaching of Keynes’s
economics. While Whitehead’s influence on John Maynard Keynes’s economics
is well established, what has received less attention is Whitehead’s metaphysically
based philosophy of education and how it can be used to ground the teaching of
Keynes’s economics. Through Whitehead we can see, argues Badeen, how to bring
out the centrality of ethics in Keynes’s own thought. The argument is connected
with (social) constructivist pedagogy for the purpose of identifying specific learning
activities that are effective vehicles for the ethical education of economists.
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Introduction 7
In their chapter, ‘Teaching ethics in a decision-making module: a guide for lec-
turers’, Malcolm Brady and Marta Rocchi provides the theoretical foundations for
the introduction of ethics within a business ethics module, with a particular focus on
managerial decision. After showing the limitations of traditional models of manage-
rial decision making (rational choice, rule-based, and character-based approaches)
they present an integrated and holistic framework for ethics in decision making based
on goods, norms, and virtues.
Ferda Dönmez-Atbaşı and Irene Sotiropoulou, in ‘Ethics and grassroots eco-
nomics: a quest for collective meaning’, present the approach to economics that
informs the grassroots economics research programme. By grassroots economics is
meant knowledge about the economy and economic practices that are created and
performed by individuals or social groups who might not have any formal economic
training. To explore this knowledge and practice, various sources are used, such
as everyday practices and folk/vernacular art, other disciplines, local languages or
theory and practice produced by social movements. Of particular interest are ideas
and practices that aim to be harmonious with nature and to sustain egalitarian ways
of production and distribution – or at least take a critical stance towards economic
injustice, discrimination, environmental degradation and inequality.
In ‘Theoretical and ethical reductionism and the neglect of subjectivity in eco-
nomics and economic education’, Giancarlo Ianulardo and Aldo Stella present the
philosophical foundations of a holistic approach to economics and ethics. This
requires, they suggest, a reinterpretation of the notion of utility in economic analysis.
As a mere numerical representation of underlying preferences, the standard interpre-
tation removes the subjective perspective of economic agents. And subjectivity is
required if agents are to be understood as capable of moral intention. It is insufficient,
however, to view agent behaviour as purposive. We must also adjust our conception
of utility. We ought, the authors suggest, to view utility as a structural component
of choice. It reflects the assumption that the relevant kinds of choice are intended.
However, agents’ specific ends are diverse and cannot be anticipated. With choice
interpreted in this way, we can remain within the traditional utility framework but
invest market decisions with a rich ethical dimension.
Félix-Fernando Muñoz and María-Isabel Encinar, in ‘On the analytical relationship
between ethics and economics: some implications for teaching ethics to economists’,
note the tendency for economics and ethics to be juxtaposed. An integrated theory
of economics-and-ethics is possible, they argue, if we adopt an ‘action plan’ under-
standing of choice. Drawing on the work of Amartya Sen and Michael Bratman, they
envisage a theoretical framework in which what agents choose to do is contingent on
their ethical values, and the success of their plans given what others simultaneously
desire. Agents’ interpretations of the qualitative dimensions of collective outcomes
influence, through their ethical reactions, what they then plan to do.
Paolo Ramazzotti, in ‘Racism, the economy, and ethics: where does it all begin?’,
discusses the relation between racism and the economy in terms of the divide between
open and closed-systems approaches, a divide that reflects different value judgements
concerning the relation between the economy and society. It begins by discussing
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8 Handbook of teaching ethics to economists
the variety of views within the closed-systems perspective, suggesting that they are
insightful, especially for countries where discrimination was institutionalized, but
that they implicitly consider racism an exogenous interference with the rules that
underlie the economy. The discussion then considers the alternative, open-systems
view, which suggests that socio-economic interaction in a capitalist market economy
originates an institutional set-up that includes racism as a constituent part, that is,
both as a means and as a consequence of distributive conflict. The social and policy
implications that the two views lead to raise important ethical issues about what ends
policy is supposed to pursue, that is, whether priorities and actions should be strictly
economic or involve society as a whole. In the latter case, the uncertainty associated
with extensive institutional change raises further issues concerning what role econo-
mists should have in the pursuit of a possibly different society.
Stefano Solari, in ‘Keeping alive non-individualistic ethics in political economy:
a review of concepts from Aquinas to Habermas’, draws on a rich tradition of
ethical thinking that emphasizes the interdependence of individual and community.
Through consideration of Aquinas, Vico, Habermas and Robert Sugden’s work on
we-thinking, Solaris brings out the importance of a collective stance to economics.
This intellectual stance, he argues, enables students to properly assess the normative
implications of economic analysis.
Huei-chun Su and David Colander, in ‘Teaching ethics to economics students in
one lesson’, take a pragmatic approach to teaching ethics to economists. While they
contend that ethics is integral to economics, they see it as unrealistic to expect ethics
to feature prominently in mainstream courses. Recognizing this, they present a vision
of what a one lesson account of ethics might contain. The central message of such
a lesson should be, they argue, that economic policy is never ethically neutral. This
necessitates a revision of the view that economists ought not to concern themselves
with policy goals.
Jonathan B. Wight, in ‘The kidney market debate: a retrospective on Becker and
Elías’, asks the question, ‘Should body parts be bought and sold?’ In an important
paper, Becker and Elías (2007) argue that markets should be used to allocate human
kidneys, and they introduce a modified supply and demand model for analysing how
paying for organs could save many tens of thousands of lives. Setting up markets
where moral norms against markets were previously operative, however, can unleash
unintended and undesirable ethical quandaries. In his chapter, White argues that the
narrow economic lens needs to be supplemented with an understanding of the broader
ethical landscape, which includes a pluralistic three-dimensional analysis of virtue,
duty, and outcome-based ethics. What Becker and Elías propose ultimately turns out
not to be a market at all, but a highly regulated and paternalistic authority that guards
against low pay, seller irrationality, and seller preference reversals. Becker and Elías
do not worry about motivational crowding out, a key concern of many ethicists. The
strongest critique of their analysis is the omission of any discussion of incentives
for the influx of organ sellers from desperately poor nations. What might move the
kidney debate forward, therefore, is for economists to see compensation as part of
a larger ethical ecosystem. Economists can do a better job of analysing controversial
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Introduction 9
public policy issues by using elements drawn from virtue ethics, deontology, and
consequentialism.
Mark D. White, in ‘A Kantian perspective on teaching ethics to economists’,
observes the utilitarian foundations of economic analysis and that, while utilitarian-
ism suffers from criticisms that are routinely discussed in moral philosophy, these are
rarely mentioned by economists, either in practice or in education. White suggests an
alternative approach: the deontological ethics of Immanuel Kant, which can supple-
ment the traditional models of choice and broaden the range of ethical motivations,
decision-making, and behaviour of individuals, firms, and governments. Kantian
ethics, grounded in human dignity and autonomy and expressed in the qualitative
language of duties, rights, and justice, challenge the dominant quantitative orien-
tation of mainstream economics based on utilitarian optimization. Given the way
that Kantian ethics can contribute to economic modelling, however, mathematical
techniques remain available, while ensuring that crucial humanistic guidelines are
followed. White’s examples provide interesting ways to introduce Kant into econom-
ics teaching.
John B. Davis, in ‘Teaching economics and ethics’, notes that as an interdiscipli-
nary field, economics and ethics has been taught in many different ways. The chapter
describes the challenges teaching this subject involves and the strategy he ultimately
adopted for doing so after trying different approaches. This strategy was meant to
address the needs of a heterogeneous collection of students, many of whom had
limited knowledge of economics and would likely not take many additional courses
in it. The course was structured around four modules opposed to one another in two
pairs: (1) Ways economics influences ethics: the market vision; (2) Ways economics
influences ethics: rationality and efficiency; (3) Ways ethics influences economics:
moral limits of markets; (4) Ways ethics influences economics: taming the market.
Each module was built around real world applications. The course finished with
a fifth module in the form of a capstone exercise – Rationing health care – that
required students to rank who had a priority for care from four individual cases of
varying life circumstances drawn from Cookson and Dolan (2000). Students used
the views they had developed in the first four modules to do this, and then explained
and discussed both their rankings and the overall rankings that prevailed over all
students. The course was taught both in person and online and in both long and short
teaching terms, emphasized student interaction and openness to different views of
how economics and ethics can be connected, and argued for democratic values in
pluralist societies.
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