George F. DeMartino
- Published in print:
- 2011
- Published Online:
- September 2011
- ISBN:
- 9780199730568
- eISBN:
- 9780199896776
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199730568.001.0001
- Subject:
- Economics and Finance, Public and Welfare
Economists alter the course of economic affairs and thereby affect the life chances of current and future generations. They do this through their scholarship and teaching, and through their ...
More
Economists alter the course of economic affairs and thereby affect the life chances of current and future generations. They do this through their scholarship and teaching, and through their leadership of and staff-level positions in important government and multilateral agencies, consulting firms, investment banks and other economic institutions. And yet, the economics profession consistently has refused to explore the ethical aspects of its work. There is no field of professional economic ethics. As a consequence, economists are largely unprepared for the ethical challenges they face in their work. This book challenges the economic orthodoxy on the matter of professional ethics. It builds the case for professional economic ethics step by step—first by rebutting the economist’s arguments against and then by presenting an escalating positive case for professional economic ethics. The book surveys what economists do and demonstrates that this work is ethically fraught. It explores the principles, questions and debates that inform professional ethics in other fields, and identifies the lessons that economics can take from the best established bodies of professional ethics. The book demonstrates that in the absence of professional ethics, well-meaning economists have committed basic, preventable ethical errors that have caused severe harm for societies across the globe. The book investigates the reforms in economic education that would be necessary were the profession to recognize its professional ethical obligations; and it concludes with the Economist’s Oath that draws on the book’s central insights and highlights the virtues that are required of the “ethical economist.”Less
Economists alter the course of economic affairs and thereby affect the life chances of current and future generations. They do this through their scholarship and teaching, and through their leadership of and staff-level positions in important government and multilateral agencies, consulting firms, investment banks and other economic institutions. And yet, the economics profession consistently has refused to explore the ethical aspects of its work. There is no field of professional economic ethics. As a consequence, economists are largely unprepared for the ethical challenges they face in their work. This book challenges the economic orthodoxy on the matter of professional ethics. It builds the case for professional economic ethics step by step—first by rebutting the economist’s arguments against and then by presenting an escalating positive case for professional economic ethics. The book surveys what economists do and demonstrates that this work is ethically fraught. It explores the principles, questions and debates that inform professional ethics in other fields, and identifies the lessons that economics can take from the best established bodies of professional ethics. The book demonstrates that in the absence of professional ethics, well-meaning economists have committed basic, preventable ethical errors that have caused severe harm for societies across the globe. The book investigates the reforms in economic education that would be necessary were the profession to recognize its professional ethical obligations; and it concludes with the Economist’s Oath that draws on the book’s central insights and highlights the virtues that are required of the “ethical economist.”
George F. DeMartino
- Published in print:
- 2011
- Published Online:
- September 2011
- ISBN:
- 9780199730568
- eISBN:
- 9780199896776
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199730568.003.0009
- Subject:
- Economics and Finance, Public and Welfare
If economists have acted ethically even in the absence of a tradition of inquiry into professional economic ethics, then perhaps there is no pressing need to develop this tradition. This chapter ...
More
If economists have acted ethically even in the absence of a tradition of inquiry into professional economic ethics, then perhaps there is no pressing need to develop this tradition. This chapter begins a two-chapter demonstration that this is not the case. Indeed, it demonstrates that leading economists violated the most basic and universal professional ethical principles in their interventions in the developing and transition economies during the 1980s and 1990s. In their efforts to promote market liberalization in these economies, economists adopted the utopian “maxi-max” decision rule which subjected communities to extraordinary risk of harm, in disregard of the prudential principle, and which violated their autonomy by denying them meaningful opportunity to give prior informed consent. Moreover, economists engaged in “reverse discounting” by failing to give sufficient attention to short-term adjustment costs. In these ways, their behavior violated the tenets of any imaginable body of professional economic ethics.Less
If economists have acted ethically even in the absence of a tradition of inquiry into professional economic ethics, then perhaps there is no pressing need to develop this tradition. This chapter begins a two-chapter demonstration that this is not the case. Indeed, it demonstrates that leading economists violated the most basic and universal professional ethical principles in their interventions in the developing and transition economies during the 1980s and 1990s. In their efforts to promote market liberalization in these economies, economists adopted the utopian “maxi-max” decision rule which subjected communities to extraordinary risk of harm, in disregard of the prudential principle, and which violated their autonomy by denying them meaningful opportunity to give prior informed consent. Moreover, economists engaged in “reverse discounting” by failing to give sufficient attention to short-term adjustment costs. In these ways, their behavior violated the tenets of any imaginable body of professional economic ethics.
George F. DeMartino
- Published in print:
- 2011
- Published Online:
- September 2011
- ISBN:
- 9780199730568
- eISBN:
- 9780199896776
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199730568.003.0010
- Subject:
- Economics and Finance, Public and Welfare
This chapter explores the culpability of the economics profession in the current global economic crisis. Like the previous chapter, it demonstrates that leading economists pursued a maxi-max decision ...
More
This chapter explores the culpability of the economics profession in the current global economic crisis. Like the previous chapter, it demonstrates that leading economists pursued a maxi-max decision rule: enamored with the elegance of the efficient markets hypothesis, they advocated a utopian scheme of financial liberalization/de-regulation despite its attendant risks to the economy (which Keynes had identified over seventy years ago). Moreover, the profession failed to promote and sustain intellectual pluralism, and instead dismissed the warnings of those economists who correctly identified the looming crisis. Indeed, the profession was overtaken by closed-mindedness, overconfidence and group-think which obstructed the free and fair exchange of conflicting ideas that are the hallmark of a vibrant intellectual tradition. In all these ways, the intellectual bubble in economics and the financial bubble in asset markets were mutually reinforcing, and helped prepare the ground for the ultimate collapse.Less
This chapter explores the culpability of the economics profession in the current global economic crisis. Like the previous chapter, it demonstrates that leading economists pursued a maxi-max decision rule: enamored with the elegance of the efficient markets hypothesis, they advocated a utopian scheme of financial liberalization/de-regulation despite its attendant risks to the economy (which Keynes had identified over seventy years ago). Moreover, the profession failed to promote and sustain intellectual pluralism, and instead dismissed the warnings of those economists who correctly identified the looming crisis. Indeed, the profession was overtaken by closed-mindedness, overconfidence and group-think which obstructed the free and fair exchange of conflicting ideas that are the hallmark of a vibrant intellectual tradition. In all these ways, the intellectual bubble in economics and the financial bubble in asset markets were mutually reinforcing, and helped prepare the ground for the ultimate collapse.
