Finding ethics in economics

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Jonathan B. Wight

It’s sometimes hard to distinguish current memory from real time memory in reconstructing a career shift. In my case, I remember the exact “Aha!” moment when my academic life took a giant swerve into ethics. One evening in 1995, I went to Borders to peruse the economics aisle. There, in a splendid rose-colored paperback, was a new edition of Adam Smith’s, The Theory of Moral Sentiments (1759). I had vaguely heard of it and owned a copy of the author’s more famous The Wealth of Nations (1776), which I had scarcely opened. Still, the notion that both could be bookends in my library seemed a satisfying idea, especially since Liberty Fund offered the volume at the ridiculous price of $7.50.

So I took The Theory of Moral Sentiments home and cracked it, certain that I would soon fall asleep. Instead, the first page grabbed me and changed my career. Here’s the opening line from 1759:

 “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”


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The Theory of Moral Sentiments

To Smith, human instincts both precede and predominate human rationality and norms of justice provide the glue for social interaction and trade. Smith’s model of sociability provides a foundation for the development and evolution of ethical norms and institutions. This was heady stuff for an economics discipline raised on the 20th century meme of selfish individualism. I excitedly told one of my colleagues, who immediately suggested we start a reading group. That we did, bringing in ten colleagues from psychology, religion, history, philosophy, political science, and law to study the text.

We learned from it what many now have discovered: textbooks often promote a caricature of Smith’s invisible hand. Smith did not support laissez faire, was a virtue ethicist who abhorred greed, and promoted policies to benefit the poor over elites. Out of that seminar grew an academic narrative, Saving Adam Smith: A Tale of Wealth, Transformation, and Virtue (2002). I made it a novel because the world did not need another ponderous tome, and Adam Smith celebrated the imaginative works of literature and art as the best media for learning ethics.


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Saving Adam Smith

With hindsight I encountered many books in my youth that resonated with Smith’s views, even though at the time I didn’t have a vocabulary or a model to understand why I was drawn to them. A Death in the Family, by James Agee, produced evocative feeling of empathy and grief. Herman Hesse’s Demian exposed me at a young age to good and evil. The perennial favorite, The Grapes of Wrath by John Steinbeck, not only provided pathos, but also introduced the harsh realities of economic depression, foreclosing bankers, and vicious strikebreakers.

As a child growing up in Africa and Brazil I was used to confronting severe poverty on daily excursions. Jorge Amado’s wonderful novels, like The Violent Land, brought out the way elites in rigged the rules in their favor, repressing opportunity and spirit. Passages in the King James version of the New Testament Bible (especially Matthew) captured my youthful fervor for economic justice.


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The Wordly Philosophers

In high school I first encountered Adam Smith via Robert Heilbroner’s masterful The Worldly Philosophers, where I learned that it was okay for economists to dream about big questions. Much later, Amartya Sen’s On Ethics and Economics gave me the courage to continue down a career path that many thought was a dead-end. When I set out to write Saving Adam Smith, the dean of my business school called me aside and sniped, “You’re an economist. Why are you wasting your time on this ethics thing?” A few years later (following the Enron scandal) he put me in front of audiences to show that yes, indeed, business schools cared about this “ethics thing.”

Another early book that influenced me greatly was Paul Samuelson’s magisterial introductory Economics, the best selling textbook of all time. Samuelson was eclectic and erudite, and never talked down to students. The text is famous for introducing Keynesian economics to American audiences, and contains a health dose of utilitarian ethics: it is surely one of 20th century’s greatest discoveries that depressions and mass involuntary unemployment can be countered with temporary fiscal expansion, and it is morally right to do so, even if a moral hazard arises.


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Far more interesting was Samuelson’s discussion of discrimination in hiring. Rather than a dry mathematical treatment—in other works Samuelson transformed the field into the physics of social science—in this text he brings out the long history in America of slavery, Jim Crow, and ghetto economics. Samuelson’s brilliance as an educator was that he understood how important the moral context was for exciting student interest and learning. The techniques of supply, demand, monopoly, and trade take on relevance only as answers to questions posed by the moral imagination.

Finally, in graduate school I encountered a text that hinted at the importance of ethical pluralism in carrying out public policies. Rendigs Fels and Stephen Buckles authored the Casebook of Economic Problems and Policies: Prac­tice in Thinking, 5th edition (1981). Rather than idolizing economic efficiency, the book trumpeted the multiple values that should always be on the table when considering public policies. My recent book goes further in recognizing pluralist principles and virtues in addi­tion to value outcomes, but this earlier text inspired and nurtured that development. We all need a prick of courage to head into the unknown, and these books, collectively, provided it.


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Ethics in Economics

Jonathan B. Wight is the author of Ethics in Economics: An Introduction to Moral Frameworks (Stanford University Press, 2015) and Saving Adam Smith: A Tale of Wealth, Transformation, and Virtue (Prentice Hall, 2002). His day job is Professor of Economics and International Studies in the Robins School of Business at the University of Richmond.

The photograph featured at the beginning of this post is copyright of Jonathan B. Wight.