Conditions for Ethics

I found the arguments from Sen and Frank to be both coherent and spot on.

I write to specifically examine an interesting interplay between the two articles.

1. As the others have covered on the blog so far, Sen laments the growing division between ethics and engineering in economics and the erosion of the former. Sen calls for us to 'demand' more from economics. Sen emphasizes how the engineering dimension of economics oftentimes trades comprehensiveness for simplicity because, empirically, simplicity has led to a predictive capacity better than shooting in the dark. Never once does Sen argue that we should give up the progress we have made, rather, he argues that we should be critical in the tools we use to assess human behavior because the inherent myopia of simplicity creates dangerous and potentially invisible side effects. In fact, I believe this should be the central question of economics -- how do we bring the tools and quantifying instruments closer to the reality we are trying to measure? To ignore this question is easy, possible, and leads to ludicrous results.

For example, what if we used GDP, to the exclusion of all other indices, to rank nation states and make political decisions? Worse, we created incentives around maximizing GDP and created policies that prevented any sort of 'deadweight loss' in GDP. The result would be ludicrous! Nations would absolutely wreck the environment, disregard drastic inequalities, and ignore ethics in the short term to achieve quick success. Likewise, what happens when self-interest and utility become the dominant, if not exclusive, metric of economic theory? Further, as Sen breaks down, why should it be the exclusive index or paradigm? The answer is -- it shouldn't. Otherwise, like in Jonathan Swift's A Modest Proposal, 'engineering economics' and 'rationalism' can justify eating millions of Irish babies in the pursuit of maximizing overall social utility. Is that really rationalism? Or is rationalism and economics without ethics something else entirely?

2. Frank, interestingly, brings an alternate world view of cooperators and defectors. One of his ultimate conclusions is that human beings are malleable social creatures capable of selfish or selfless actions based on the conditions and contexts surrounding them. If the right conditions are created, human beings may (and indeed have strong, internal impulses to) act in mutually beneficial cooperation; absent these conditions, they return to the prisoner dilemma defector situation. Cross applying Sen and the above examples: if economics assumes that all people are self-interested utility maximizers, three problems emerge:

1) Obviously, economic theorists miss the opportunity to capitalize on understanding different human motivations

2) By assuming certain human motivations, the tools they use and the policies they create both assume certain conditions and -- even worse, might create or perpetuate conditions that foster defectors (like how using GDP as the sole index creates conditions antithetical to cooperating to save the environment or reduce inequalities)

3) Further, they miss the opportunity to engineer or create conditions which support cooperators.

This echoes, and brings a slew of behavioral science experiments to prove further, the arguments of Hampton on the ethic of care vs justice. Economics might not just be missing the understanding of the ethic of care, it might actually (itself) be creating the conditions which undermine its usefulness. This has dramatic potential for side effects by the forced assimilation of women into a system which only respects and rewards the 'self-interested man' or 'homo economicus.'

This is not a question of economics accepting a duplicity of human motivations just for improving models and predictive capacities, rather, this is a question of the impacts of the models themselves. Homo Economicus is pure fiction, but that doesn't mean it doesn't have real daggers.