March 12, 2012

Welcome to the WEA conference on Economics in Society: The Ethical Dimension. On behalf of everyone involved in putting the conference together I would like to thank all our contributors, as well as all those who submitted papers we had no room to include. The amount of thought represented here is very extensive and is testimony to the issue and to its need for a proper airing. I am especially pleased to see we have a number of contributions from outside the economics profession itself. That fresh perspective is much needed and much appreciated. I am also sure our authors are keen to hear from the WEA community – this kind of discussion was one of the reasons that prompted us to form the WEA a few months back.

There is  much to debate and comment upon. It is not too late to register in order to comment, so please go ahead and join in.

Using the internet as a conference space is fairly novel, and we are admittedly learning as we go along. If you find glitches contact us, you can find our e-mail addresses further down on this front page.

We are now “open for business” and comments are building up. We will be moderating the commentary so there will be an inevitable time lag between your posing one and its subsequent appearance on the site.

We have grouped the appears into what we think of as logical sets. The comments will be associated within each set, so please be specific when referencing papers. Already we have been asked how to make comments linking across groups: the best way to do that is to make your comment in the most relevant spot and then to leave a cross reference comment elsewhere. This is cumbersome, but is an unfortunate side effect of our technology. Hopefully it doesn’t inhibit you in any way.

With that said: welcome once again. This is your space. Make the most of it.

Thank you.

Peter Radford

  1. March 12, 2012 at 6:11 pm

    A general comment
    I think the word “ECONOMY”is combining 2 different approaches even formally divided at academic level: the PRINCIPLES OF ECONOMY as a set of specific and natural phenomenons according to given conditions and the ECONOMIC POLICY as store of tools who can be suggested by the economists to the decision makers, beginning from the national governments, to hit the targets or to correct automatic trends of the working system or regimes (capitalist,collectivist,soicialist,etc,).
    The first activity is or should be the realm of the Logics and so not liable to values and more generally to the Ethics concerning wanted behaviours, while the second one, the Economic Policy, is an activity of making and how to make, as such totally subject to the Ethics. The gravity cannot be judged unethical even if it is often killing a lot of people.
    Probably the Economics is not a positive science exactly as the Physics and the Chemistry even from the last steps of the Philoshy of Science and the analysis of Karl Popper, notwithstanding the rationality of its core. The assumption of the general economic rationality of the human subjects, the degree and the advance of the possible forecasts, the closed links (especially of the Macroeconomy) with different bodies of knowledge as the Sociology and the collective Psychology are all specific features of the Economics. No doubt the concentratioin of the economic research to a group of similar subjects (developed capitalist economies), a wanted or unwanted condition, easily was producing “the triumph of ideology over science in America’s graduate schools” according to the Nobel prize Joseph Stiglitz and I must add not only in America. However the mistakes in the area of knowledge, wether from the oversimplification of the homogeneity of observed subjects or from the unstability of the models, as in the case of the general equilibrium or because of the difference between “statistical” and “economic” significance of the data are all logical mistakes. They can even affect the Economnic Policy reducing the number and the types of tools, from there the need of pluralism in the research as in the teaching or an usual comparative analysis of the main pillars (allocation of resources, shaping of prices, etc,) under different regimes (capitalist, collectivist, socialist, mixed) even if someone of them or even some type collapsed.
    About the Economic Policy I agree with a cklear cutting between the suggestions of the economists and the following decisions of the people entitled to govern as the possible assembly of tools pertaining to different regimes, but we can ask more, as indications about the possible conflicts of the recommended tools between themselves and with human rights and democracy’s rules, as it can happen for instance when the control of births or the forced savings, the censorship of economic information or the privatization of public assets are included in the treatment. An other step can be the authentic (by the economists advisors) forecast of the impact of tools on some selected key indicators as distribution of income, ecological control, development of weak areas, employment,etc,
    As all scientists, the economists are laic, from where they disregard the “orthodoxy!” and the “eresy” and they can combine tools applied in different regimes. Unfortunately in the real life many economists prefer a partisanship with the prevailing political regime to attain more easily top positions,what is not a correct attitude
    Giuseppe M.F:RUSSO Ph.D. Economic Policy

    • peterradford
      March 22, 2012 at 8:03 pm

      From Susumu Ono:

      I am appreciative of Giuseppe’s useful comment

      I think Giuseppe asked me about the close relationship between value and logic, and between theory and policy.

      (1) John Maynard Keynes reasons cause and effect of social and economic phenomena by using inductive reasoning, not deductive one. However, inductive reasoning has no solid ground as a method for the truth quest. It just shows the probable relationship between cause and effect.
      He published “Treaties on Probability”(1921) in order to establish a solid ground for the induction. Keynes encountered Frank Ramsey’s criticism that probability is concerned not with objective relations between propositions over which Keynes argues but with degrees of belief. Keynes accepted Ramsey’s criticism while he believes there must be a solid base in inductive reasoning.

      Keynes says, in a letter addressed to Roy Harrod (4th July 1938), ‘It seems to me that economics is a branch of logic, a way of thinking・・・Economics is a science of thinking in terms models joined to the art of choosing models which are relevant to the contemporary world’. The reason is that (a) economics ‘unlike the typical natural science, the material to which economics is applied is , in too many respects, not homogeneous through time’ and that (b) ‘the object of a model is to segregate the semi-permanent or relatively constant factors from those which are transitory or fluctuating so as to develop a logical way of thinking about the former・・・’ (Keynes1973,pp.296-297).

      (2) However, it seems to me that he does not give a concrete and clear-cut explanation as to why economics is a branch of logic.
      According to the standard social theory, descriptive factors (interests, power, institutions and so on) are regarded as being objectively decidable, whereas value statements as being matters of personal preferences. This is a wrong way of thinking.

      The social value is in play in a given society as the normative perspective. Therefore, values belong to the public realm. Values which underpin social norms are central to understanding from both the perspective of interpretive and objectively understandable social science.
      In Hume’s Treaties, Hume brought forward a famous proposition that one cannot derive an ‘ought’ from an ‘is’. The reason is that an ‘ought’ logically is distinct from an ‘is’. In contemporary terminology, we cannot derive values from facts. It turns out that economics is not concerned with value or policy, even if one collects, arranges, and analyses economic facts.

      (3) Searle(1964) tries to demonstrate a counterexample to this Hume’s thesis.
      If one cannot derive an ‘ought’ from an ‘is’ alone, one needs an additional normative premise (Klein ed.1994, p.22). Economics has ‘developed’ many economics tools in the post Second World War. Today policy makers get used to use them in order to make public policies under a certain value judgment.

      Is this Hume’s proposition with the value- fact distinction right, in relation to economic policy making?

      (4) What is “Is”?

      ‘Is’ is what is discovered by analysis and results from previous choices made on the grounds of what ‘ought to be ’ or ‘ ought to do’(Dyer1997,p.146).This involves a whole defies the sharp is-ought distinction.

      (5) Popper’s theory of falsifiability holds that scientific generalisations are not verifiable, In Popper’s theory of falsifiability, falsifiability is the only means of verifying a scientific truth. A scientific proposition wins ground through argument, demonstration and discussion. Following him, the metaphysical propositions are neither verifiable nor falsifiable, whereas he defies an inductive method in the extreme.

      (6) Policy making is held to be objective interests as a means of determining ‘correct action. Accordingly, public policies are presented as objective reality= rational action based on interest calculations (Dyer1997, p.147). Value considerations are not to be relegated solely to ethics, but belong at the heart of logic and epistemology. Because values are prior to interests. Hence, public policy makers must take into consideration the value structures and interests underlying world views (Dyer 1997, p139).

      (7) William Stanley Jevons, who could be considered the first welfare economist, is criticised for separating economics from public policy. Nevertheless, his inquiry was directed to build a science which touches so directly the material welfare of the human race (Jevons1871, p.261). His books’ purpose was to reduce the number of the poor. In this sense, he was a moral scientist.


      Dyer, Hugh C.(1997) Moral Order/World Order, The Role of Normative Theory in the Study of International Relations, London, New York . Macmillan.
      Jevons, William Stanley (1871) The Theory of Political Economy, ed. R.D.Collison Black, Penguin Books.
      Keynes, John Maynard (1973) The Collected Writings of John Maynard Keynes XIV, The General Theory and After , Part II Defence and Development, Macmillan.
      Klein, Philip A. ed. (1994) The Role of Economic Theory, Boston/Dordrecht/London.
      Kluwer Academic Publishers,
      Searle (1964) How to Derive “Ought” from “Is”, The Philosophical Review, ed. By The Faculty of The Sage School of Philosophy, Cornell University, Vol. LXXIII, Ithaca, New York.

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