This post is the fifth in a series about ethics, theology, and critiques of economic methodology. Each post is a portion of an early draft of a paper that is forthcoming in the Journal of Interdisciplinary Studies. Here is a table of contents for the full series:
- The Separation of Facts and Values
- Rationality, Greed, and Reductionism
- Normative Rationality and Economic Culture
- A Faithful Practice of Economics (this post)
A PDF of an early draft of the full essay is available here.
Many of these arguments will sound unrealistic to modern ears. Even if we accept this critique wholesale, we are given little guidance as to how we should proceed in the practice of economics while simultaneously rejecting the institutional and intellectual context of our work. A pious economist might yearn for a rich vocabulary of virtue, but find that she cannot adopt a moral framework without sacrificing a rich body of theory as well as her ability to communicate with a modern audience. How should economists proceed? Many would argue, at this point, that the neo-classical economic framework is the problem, and that our troubled economist should join the ranks of the academically marginalized, but intellectually courageous “heterodox” economists. There are still communities of economists that work with explicitly moral vocabularies. Social economists, while methodologically varied, share a rejection of the limitations imposed by the “value-free” rational-choice approach. Alternatively, an economist might find that their theological framework fits better with ecological economics, feminist economics, or new institutional economics. All of these approaches warrant exploration by more scholars.
It is not necessary, however, to reject neo-classical economics. The rhetoric of these theologians may be overly strong, but their critique can still guide a thoughtful economist. I will offer two suggestions for the practice of economics. Broadly I agree with Yuengert (2012, 2014) that economic modeling should be subject to, and used in service of, a broad understanding of virtue. This implies at least two methodological changes. First, economists should strive for a more limited, but less restrictive kind of objectivity in their work. Second, economists should put economic analysis to the service of explicitly moral goals.
First, it is worth noting that much of the problem with economist’s positive-normative distinction is that we end up working with starting assumptions that are not made explicit. Economists can still strive for an honest objectivity, however, without claiming that our objectivity is absolute. Many thoughtful economists do this naturally. Usually, the underlying goal of economists is to avoid the kind of political or ideological baggage that hinders debate. We can achieve this same goal by training ourselves to name the debates that we do want to speak to, and similarly identify the debates we are going to avoid. When doing research about minimum wage laws, an economist could recognize that debate about this policy includes questions about the nature of market valuation, questions about fundamental rights, and the ethics of market power. Leaving these questions aside, for the purposes of a particular project, can allow the scholar to focus on the part of the debate revolves around the price sensitivity of employers and resulting unemployment rates. Since this part of the debate is empirical, economic research can contribute to the policy discussion through careful econometrics.
One result of this minor shift in practice is that economists might be more likely to come to terms with the limits of our own methods. For example, an economist who is using experimental methods to assign quasi-market values to elements of nature should note at the outset that economic methodology allows one to be a neutral arbiter in a debate about the true market value of a forest, but not in a debate about whether the value of a forest should be based on human preferences. Experimental and other empirical methods really do provide a kind of objectivity, but it is a kind of local objectivity, that does not protect economists from making ethical assumptions in the kinds of questions we ask, the kinds of data that we gather, and the kind of recommendations we make. It would be good practice for economists to come to terms, at least broadly, with the contours of the ethical debates that they are unwittingly participating in.
A second good practice, which has already taken root in the discipline, is to use economic logic and tools to pursue explicitly moral goals. While this will sound to economists as if we are abandoning our objectivity, even value-neutral economists have no trouble working under the assumption that poverty and environmental pollution are bad while education and macroeconomic stability are good. Economists are sometimes tempted, however, to value these things for the wrong reasons, as if education was only valuable if and when a person is more economically productive, or as if pollution is bad only if and when people are willing to pay money to clean up the environment. This frame of mind can lead economists (and policy-makers) to direct their technocratic impulses in such a way that these good things are slightly distorted. Education is reduced to job training and the natural world is reduced to hedonic consumption values.
Each of the theologians discussed in this essay have particularly criticized economists’ unwillingness to orient economic analyses toward an ultimate good. Even if most of the work of economists is clearly aimed toward laudable goals, our current approaches allow economists to avoid grappling with the moral questions that are at the heart of the discipline. Economists usually assume that we can focus on pursuing a loose approximation of the good, ignoring an ultimate good. This is dangerous, however, in an age that idolizes the proximate goods that economists pursue, such as wealth and liberty. As such, it is too easy to do excellent economics that does not contribute to ultimate ends because it is aiming at a false substitute. This distorted vision of the good is not necessary. Economists should be able to start their work by stating their moral aims and unabashedly pursuing them as economists. For example an economist could state that “this study assumes that endangered species of birds have intrinsic value, and warrant immediate public protection,” before proceeding to examine the most effective way to organize species-protection efforts.
The disagreements between economists and theologians can seem unresolvable. Nevertheless, the dialogue can be ultimately fruitful for both sides, if we recognize that the two groups often have fundamentally different concerns and are working from very different paradigms. The points of conflict sometimes are the result of confusion, but sometimes theologians are able to stand outside the biases of modern social thought better for having studied a longer tradition. Moreover, while economists have the luxury of disagreeing and discounting particular theologians, Christian economists must take theology seriously as an authoritative source of knowledge about ultimate concerns. I propose here that economists could maintain the objectivity we seek, and maintain a methodological consensus, while still being far more open to the larger ethical debates that we contribute to. Given that we are committed, as a discipline to the process of making public policy, we should have standards of excellence regarding our ethical logic that are just as strenuous as our standards for empirical and theoretical work.
Yuengert, A. M. (2012). Approximating Prudence: Aristotelian Practical Wisdom and Economic Models of Choice. New York: Palgrave Macmillan.
Yuengert, A. M. (2014). It’s Not Bad to Have Limits, as Long as You Know Them: What the Aristotelian Tradition Can Offer Economics. Faith & Economics, 64, 37–54.