Ethics, Politics, and Economists

You may have seen the article in the New York Times referring to the discussion within the economics profession about ethics. Or rather the apparent lack thereof. There has been an outpouring of commentary within that part of the blogosphere devoted to economics, so I thought I would add my own and personal perspective.

Almost alone amongst the social sciences economics has no professionally determined code of ethics. This is odd since the subject prides itself on its contribution to social welfare via its theorizing and subsequent policy recommendations. Economists have a disproportionate impact on the lives of their fellow citizens precisely because of the subject matter. Economic wellbeing is a vital topic for everyone. The recent crisis and the policies put in place to lift us out of it are testimony to the impact the ideas of economists can have.

So you would think that the discipline would be careful with its theories, and make sure that they were efficacious, sensible, and socially productive.

Not so.

True to the market magic roots of the dominant form of economics, what I call orthodoxy, its practitioners see no need to have an organized policing of their activities. The cut and thrust of competition, and the scientific notion of replication of testing are presented by many as sufficient restraint on wayward behavior. Robert Lucas is quoted in the NYT article giving exactly this reason for the lack of need for a formal ethical standard. Economics people like him argue is a science not a technology, and thus those who make policies based upon its ideas should take care themselves if they engineer society based upon Lucasian or related theory. Caveat emptor rules the day. These same folks have no interest in a collective responsibility for their subject. Why would they? Their most cherished assumption is based upon the concept that individualism is paramount. Thus to them a collective or group exercising authority to restrain unethical behavior is an unnecessary intrusion into the private world of the individual. For them ethical standards begin and end with the individual, not with a group.

They thus elide responsibility for their group. That the world was plunged into the abyss because politicians and bankers put orthodox economic ideas into practice is not, apparently, an ethical consideration. Nor is the need to reveal potential conflicts of interest individual economists may have when being asked to render a professional opinion.

So economists are free to give opinions, which they do with abandon; they are free to write popular books examining everyday topics through the often jaundiced and simplified lens of orthodox economics; they can join boards; they can go on television, write editorials, engage in debate, and otherwise seek to bend the real world to conform to their theoretical constructs; and above all, they can seek to profit from their theories by engaging in business either directly, or as consultants, all without ever revealing their prior connections, entanglements, or other involvement.

In short they can come and go from their mountain top without ever having to explain themselves fully.

I take deep issue with this.

Aside from the more mundane need to reveal sources of funding and other potential conflicts of interest that may or may not distort an economists research agenda and advice, there is the matter of the impact economic ideas have on the common good.

Doctors are enjoined to do no harm.

Economists are free to do as much damage as they like. One of the most worrying trends of the last three decades has been the total commitment of orthodox economic ideas to supporting a generally right wing political agenda. This may be unwitting. It cannot be unnoticed. Only the most blind of professors could have ignored the incessant anti-government rhetoric, the attacks on regulation, and the attempts to undermine the social safety nets put in place during the years of Keynesian hegemony. It is a nice but specious distinction to argue that such attacks are simply the result of an improved theory. It is convenient to overlook the ideological taint that permeates such theory, but the surely taint exists.

Some economists complain that non-orthodox economists are too invested in left of center politics. It may well be true that some heterodox economists are not exactly friends of the Republican party. But that merely shifts the question it does not answer it. Heterodox economists are not those claiming scientific status. They are not claiming to be “positive”. They, mostly, recognize the intractable connection between politics and economics. It is the orthodox, the market magic folks, who make such claims and thus hide their ideological roots beneath the skirt of scientific righteousness.

So as the debate about ethical standards roils on I feel foolish to have to point out that ideas have consequences. This is hardly a revelation. But to hear people like Lucas speak you would think it is shockingly new. For someone with his stature to belittle the need for the discipline to act with the utmost care, and to enforce even a simple standard of ethical behavior, is in my opinion, a dereliction of duty. He teaches his ideas to future leaders of business and politics. He has a responsibility to ensure that those ideas do no harm. He may well think they conform to that standard. I disagree. They are failed and destructive. To me that disagreement lies at the heart of the discussion. To perpetuate failed ideas; to prolong the damage they can do; and to seek to influence young minds without reflection on the failure of those theories is plainly irresponsible.

To admit of no error is not human. Nor is it sound science.

As a minor part of the community, I say: stop.

Ethics deserves a discussion.

Economics requires a standard.

We may disagree on many things, but we should agree to do no harm.

I hope Professor Lucas relents and engages more fully in the discussion. He owes that much to the subject.