Philosophy of Economics
University of Wisconsin-Madison, 2015
This is an unusual class, in which I hope to exploit you while at the same time providing a valuable learning experience for you. The reading for the course will consist largely of the rough draft of the third edition of Economic Analysis, Moral Philosophy, and Public Policy (EAMPPP), which is co-authored by Michael McPherson, Debra Satz, and me. EAMPPP aims to provide a general introduction to (a) the influence of ethical considerations on positive economics, (b) the tools and concepts of normative (welfare) economics, (c) the most important ethical theories and concepts that are relevant to the concerns of economists, (d) the ethical limits of capitalist markets, (e) analytical tools forged by economists that may be of use to moral philosophers, and (f) the distinctions between positive and normative economics and the relations between them.
There may also be supplementary readings. There will be some lectures -- how many will depend on how successful you and I are at generating fruitful discussion. I shall distribute reading or study questions before each class and ask you, with the help of those questions to study a chapter or section of EAMPPP and then come to class with tentative answers to the study questions and especially objections, criticisms, questions, and suggestions for improvement. Class discussion will be structured around your comments and questions. I will, of course, have a good deal (indeed probably too much) to say.
Whether this turns out to be a great class or a mediocre one thus depends crucially on your input. If you get excited about the issues and are full of questions and challenges, you can make this into an excellent course. Of course, I’ll bear lots of the responsibility, too, in guiding your reading with study questions and in making my contributions to discussion clearly and briefly and then shutting up.
The overall goal is to give you a grasp of the terrain at the boundaries between economics and ethics where policies are born and die. The guide to the exploration of this territory is the third edition of Economic Analysis, Moral Philosophy, and Public Policy.
More specifically the course aims to accomplish a long list of goals:
- To give students an appreciation of the ethical and political commitments that are often implicit in purportedly value-neutral “positive” economic theorizing.
- To provide an introduction to standard welfare economics, including the notion of social welfare functions and cost-benefit analysis.
- To provide an introduction to those concepts and theories in ethics and political philosophy that are most relevant to normative economics. These concepts include welfare, efficiency, freedom, rights, equality, solidarity, benevolence, capabilities, and justice, and the most important theories are utilitarianism, libertarianism, egalitarianism, and Rawls’ theory of justice.
- To provide an understanding of the character and moral implications of market relations among individuals and of the appropriate limits to market relations. In other words, what should and shouldn’t be for sale?
- To provide an introductory grasp of tools economists have developed that are of potential value for ethical reflection and political theorizing. These include rational choice theory, social choice theory, and game theory.
- To provide a grasp of the relationship between positive economics (which purports to explain and describe in an ethically neutral way) and normative economics and policy, which depend on values.
- In addition, a more general goal is to provide an introduction to the nature of argument and of informal logic in general: To the extent that this course helps you to make and criticize arguments, it should be valuable for you, quite apart from its particular subject matter.
- Lastly, the course aims to help you to develop your abilities to present and to criticize arguments both in discussion and, in particular, in writing: Every good essay, regardless of the subject matter, is an extended argument for some thesis or conclusion. The only thing special about philosophy essays is the extent to which one focuses upon the logic of the argument. This course should help you to write more sharply organized, focused and effective essays. It is hard to separate bad writing and sloppy thinking.
The extent to which these course goals can be achieved is largely up to you, but it is important that you appreciate what I am trying to accomplish. If you cannot see how any particular discussion or reading assignment relates to the goals of the course, ask about it. In abstract matters it is especially important and especially difficult to be clear on what the point is. Keep asking "So what?"
Since this course is more concerned with mastering skills than with acquiring information, it demands your active participation, and I think that the interest and importance of the issues we will be addressing will reward that participation.
What this course does not aim to do:
- This course does not aim to cover the material that one would expect to find in an introductory economics course. Although there will be significant economic content, it will be limited to matters that are relevant to the goals listed above.
- This course does not aim to cover the material that one would expect to find in either an introductory ethics course or in an introduction to political theory. There will be a great deal of philosophical content, but it will be limited to content relevant to the course goals.
- This course does not aim to provide simple answers to current problems of economic policy. I hope that the clarifications this course provides will help you to make up your mind on policy questions, but the course does not aim to answer them. What is important in the course is intellectual honesty and the sort of perseverance that makes one struggle to bring one's convictions and the weight of argument into accord. The course should help you rationally to make up your own mind concerning whether there should be a higher minimum wage, higher (or lower) taxes on the wealthy, reliance on markets or government to provide health care or to protect the environment, and so forth.