Download Poisoning the Well, or How Economic Theory Damages Moral

Julie A. Nelson
Department of Economics
University of Massachusetts Boston
[email protected]
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“Narrow self-interested utility and profitmaximization are the norm in business and
market life.”
“The economic system is a giant
mechanism.”
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The assumptions about norms are not true.
The mechanistic assumption is based on a
methodological aspiration, not observation.
And together they discourage pro-social and
careful behavior within private sector
economic life.
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Business and commerce really don’t require
ethical concern.
Business and commerce really don’t permit
ethical concern.
The assumptions of economic theory are
required for scientific rigor.
Economic theory is broader than that.
So what if economics is narrow? Something
else will fill the gaps.
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(Bad interpretation of) Adam Smith
Milton Friedman
private sector/public sector dichotomy
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Jürgen Habermas
“critical” literature
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Pro-social behavior by individuals (Fehr and
Falk; Margolis)
Actual corporate law and business history
(Stout)
Worse-than-profit-maximizing behavior
Impossibility of a system based on
opportunism (e.g. financial crisis) (Y. Smith)
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Counterarguments:
◦ math ≠ objectivity
◦ Dogma is the antithesis of science
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In seminar rooms, yes, but look at the
undergrad and grad “core” curriculum.
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The State? Re the Walt Disney Company
Derivative Litigation
Theories of justice? Posner and Weisbach’s
Climate Change Justice.
Families and non-profits? Starving the caring
sector under the guise of “protection”
Commonsense ethical sensibilities? Not if
calculation is made salient.
Hiding the social and fragile nature of
economic life,
for the purpose of furthering
methodological ambitions,
undermines moral imagination
…and moral action.
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Drafted for submission to The Oxford
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Deirdre McCloskey
[email protected]
University Press Handbook on Professional
Economic Ethics, ed. George DeMartino and