I mentioned in previous notes on posts that one of the regular commentators, 'Lord Keynes', would be given the opportunity to post on the blog. Lord Keynes is one of the regular commentators, and often writes a considerable amount of material, which is always well researched and well considered. However, many of the comments that are made run counter to the general thesis of this blog, and have proved to be controversial with other commentators. As such, in the spirit of generating debate, I have offered Lord Keynes an open remit to write a post on any subject, and his post can be found below. I hope that it proves to be of interest, and look forward to the insightful commentary that usually follows my own posts. The post, on ethics and economics, now follows:
Economics and Ethics
Whatever economic system you advocate (e.g., libertarianism, free market economics, neo-liberalism, social democracy, democratic socialism, communism etc), in intelligent debate you should be able to justify that system by appealing to some philosophical or ethical theory, if you want to convince other people of the morality or superiority of your system and your arguments.
In the end, this comes down to choosing an ethical/moral theory, a system that explains your view of morality: that is, why actions are right or wrong.
The only effective theories available to justify a larger philosophical system in a consistent way are objectivist theories of ethics (that is to say, a subjectivist or relativist theory of ethics is self-defeating).
In essence, an objectivist theory of ethics holds that:
– moral judgements are propositions that have an objective value, either true or false (e.g, “The unjustified killing of another human being is wrong”);
– the truth of a moral proposition remains true regardless of the subjective opinions of a person or the values of a different culture (e.g., “Slavery is wrong”);
– morality is not subjective or relative.
If we want an objectivist theory of our morality, we essentially have these options:
Moral Objectivist Theories of Ethics:
(1) Moral absolutism
(a) Divine Command Theory
(b) Categorical Imperative ethics (Kantian ethics)
(2) Moral Universalism (also called minimal or moderate moral realism)
(i) Deontological theories:
(a) Natural law theories (Plato and many Christian philosophers)
(b) Thomist ethics
(c) Pluralistic deontology, the non-absolutist ethics of W.D. Ross
(d) Human rights objectivism (Rawls)
(ii) Consequentialist theories:
(e) Utilitarianism (act utilitarianism; rule utilitarianism)
(f) Ayn Rand’s objectivism?
(iii) Ayn Rand’s objectivism?
(3) Utilitarian Kantian Principle of James Cornman (combines deontology and utilitarianism
All of these objectivist theories of morality/ethics can be divided into 2 basic groups as follows:
(1) Deontological theories (= duty or obligation based morality): the basis of morality is duty and some acts are always right no matter what consequences they can cause (the best example of which is Kantian ethics or some forms of divine command theory; Kant famously said that it is always wrong to lie, no matter what the circumstances).
(2) Consequentialist theories: the basis of morality is the evaluation of the consequences of acts on people (the most famous such theory is Utilitarianism). The greatest happiness of the greatest number of people is one way of describing it.
(I will not address the question whether Ayn Rand’s objectivism is consequentialist or in a category by itself, since this is disputed.)
Use your intuition and find out whether you subscribe to (1) a duty-based ethical theory or (2) a utilitarian or consequentialist ethical theory by thinking about this moral problem:
A known murderer comes to you and asks to know where a person he wants to kill is, and you are aware of his desire to commit murder. Do you:
(1) Lie to protect the innocent person and say you do not know, or
(2) Tell the murderer where that person is in the knowledge that a murder may
Decision (1) makes you a utilitarian, and (2) a believer of duty-based ethics. Immanuel Kant, although it hard to believe, held that (2) is the moral course of action, since lying is always immoral, under all circumstances.
Ethics as Applied to Economics
Divine command theory is easily refuted: e.g., if god orders someone to commit genocide, then this suddenly becomes a “moral” action, because God has ordered it. Thus divine ethics turns out to be a subjective theory of ethics: what is moral and what is not actually depends, in the end, on the arbitrary whim of God, not the goodness of actions or their consequences. (Kantian ethics was in fact partly an attempt to create an objectivist ethics that could defend Christian morality, but remove this problem by basing morality on moral principles derived from human reason.)
Many libertarians rely on a natural law/natural rights theory of ethics.
Thus they often argue that state intervention is bad when it violates private property rights, and that this government action is always immoral, irrespective of the good or bad consequences that state intervention has or may have.
Natural law as a theory can be traced back to Plato, the ancient Stoics, and many Christian philosophers. (Contrary to popular belief, the most widely-held theory of ethics in the Middle Ages in Christian philosophy was the natural law theory, not the crude divine command theory.)
Natural law was famously attacked by the English utilitarian philosopher Jeremy Bentham as “nonsense on stilts.”
One of the main weaknesses of natural law theory is that its main historical justification was the belief in a “divine order” and a divinely-created human nature that makes us conform to “natural law.”
For Plato, the divine soul made human beings conform to the natural law of the universe. In ancient Stoicism, all humans had a divine reason given by the gods to make them adhere to divine “natural law.”
When natural law theory was taken up by Christian theologians, they simply substituted the Christian god for the gods of the Greek and Romans.
In the early modern period, rationalist European philosophers like Grotius tried to defend natural law theory by removing God and the previous supernatural justification for it.
However, in doing so, they destroyed the only convincing explanation for belief in natural law (Tawney 1998: xxv-xxvi).
Thus anyone who accepts an atheistic and naturalistic scientific view of the universe, and who rejects all religion, has no reason to believe in natural law or natural rights.
It follows that all modern types of libertarianism or free market economics based simply on a “natural law” or “natural rights” foundation are severely flawed systems (e.g., the systems of Adam Smith or Murray Rothbard).
There is no reason to believe that the “natural law” that justifies placing inviolable property rights at the centre of our modern political or economic systems has any validity whatsoever.
In my opinion, Kantian ethics has no real consequences for economics: it can be used to justify numerous economic systems and is fully compatible with social democracy.
However, Kantian deontological ethics has severe problems.
A better ethical theory, in my view, is a modern form of utilitarianism called rule utilitarianism (which is quite different from its crude early form as advocated by Jeremy Bentham).
Some libertarians or advocates of free market economics actually do use utilitarian arguments to justify their positions and economic systems (e.g., Ludwig von Mises, the earlier Friedrich von Hayek [Gregg 2003: 21-22], and Milton Friedman [Frederick 2002: 23]).
Thus anyone who uses a utilitarian argument to support ideas about economics will ultimately have to examine the good and bad effects of the policies they advocate.
In these theories, there is no a priori reason why state intervention could not in principle be moral and successful.
Any economic argument, then, essentially becomes an argument about empirical reality: the consequences of economic policy today and in the past.
The good consequences of state intervention and social democracy for the greatest number of people in society fully justify these policies.
Of course, philosophical objections have been raised to utilitarianism.
One solution may be that we should adopt James Cornman’s Utilitarian Kantian Principle of ethics: this (as I understand it) has caused a great deal of excitement amongst modern philosophers, because it combines the best elements of Kant’s deontological ethics with utilitarianism. It is perfectly compatible with state intervention in economics.
Frederick, R. 2002. A Companion to Business Ethics, Blackwell, Malden, Mass.
Gregg, S. 2003. On Ordered Liberty: A Treatise on the Free Society, Lexington, Oxford and Lanham, Md.
Scruton, R. 1994. Modern Philosophy: An Introduction and Survey, Penguin Books, London.
Tawney, R. H. 1998. Religion and the Rise of Capitalism, Transaction, New Brunswick, N.J. and London.
J. W. Cornman, K. Lehrer, and G. S. Pappas. 1992. Philosophical Problems and Arguments: An Introduction, Hackett, Indianapolis.