• Can economics be a value-neutral science?

    moral reasoning

    Michael Sandel thinks it can’t, in this really nice paper in the last issue of the Journal of Economic Perspectives :

    Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy
    In my book What Money Can’t Buy: The Moral Limits of Markets (2012), I try to show that market values and market reasoning increasingly reach into spheres of life previously governed by nonmarket norms. I argue that this tendency is troubling; putting a price on every human activity erodes certain moral and civic goods worth caring about. We therefore need a public debate about where markets serve the public good and where they don’t belong. In this article, I would like to develop a related theme: When it comes to deciding whether this or that good should be allocated by the market or by nonmarket principles, economics is a poor guide. Deciding which social practices should be governed by market mechanisms requires a form of economic reasoning that is bound up with moral reasoning. But mainstream economic thinking currently asserts its independence from the contested terrain of moral and political philosophy. If economics is to help us decide where markets serve the public good and where they don’t belong, it should relinquish the claim to be a value-neutral science and reconnect with its origins in moral and political philosophy.

    Actually worth reading until the end. Two main claims here. The first one, which is made quite forcefully, is that introducing market relationships in all spheres of human and social interactions is not just about efficiency as we economists understand it, but also about the fact that it may change the very nature of the goods or services so traded, and may erode or corrupt nonmarket values and norms.

    As for the second one, you will discover, like I did, that there are economists out there (and not the least of them) who think that “ethical behavior is a commodity that needs to be economized”, something that can precisely be done by relying on markets whenever possible. Fascinating isn’t it? I am quite sure that this could be addressed (and refuted) nicely in the context of some of the topics that are of interest to development economists, such as the evolution of risk-sharing networks, social capital, etc.

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