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Foundations for A Moral Political Economy

Paper Session

Friday, Jan. 6, 2023 2:30 PM - 4:30 PM (CST)

J.W. Marriott New Orleans, Bacchus
Hosted By: Association for Social Economics
  • Chair: Paolo Ramazzotti, University of Macerata

The Moral Economy of Austerity: A Failure of State Duty?

Gerry McCartney
,
University of Glasgow
Andrew Cumbers
,
University of Glasgow
Robert McMaster
,
University of Glasgow

Abstract

Debt, prudence, and austerity possess notable and longstanding ethical properties. We talk of the debt a prisoner has to society and the virtue of prudence (Graeber, 2012). Arguably, the morality associated with these terms is applied to the state in mainstream economics and public discourse. We argue that this is based on a false and egregious equivalence between individuals, households, firms, and the state. This, unfortunately, is the conventional wisdom: the ‘common sense’ of neoliberal economic hegemony. The work of Post Keynesians and others in this field is challenging this position (Kelton, 2020; Wray, 2015), with notable contributions discrediting the posited relationship between state debt and growth (Herndon, et al, 2014). The conventional Ricardian equivalence view that state debt and deficits impose future costs is employed as a justification for austerity both from an economic perspective (centring on crowding out) and a moral one in the form of indebting coming generations due to the ‘excesses’ of the current one. In this paper, we challenge an aspect of the basis of the moral dimension tacit in the Ricardian equivalence argument. We focus on the relationships between austerity and various measures of life expectancy and mortality. In our view, central duties of the state, include, the protection its citizens from harm or threat, and perhaps more contentiously enhancing their wellbeing. Indeed, the pandemic highlighted this issue. Yet, recent work presents evidence that austerity adversely impacts on mortality and lifespan variation (McCartney, et al, 2022). We consider the moral economy of austerity in this light.

Racism, the Economy and Ethics: Where Does It All Begin?

Paolo Ramazzotti
,
University of Macerata

Abstract

The aim of the paper is to discuss a range of ethical issues related to the racism-economy relation. In order to do so it begins by pointing out the intricacies involved in providing a rigorous definition of racism. It then distinguishes two approaches to economics: the conventional closed-systems one and the heterodox open-systems one. While the former approach focuses mainly on the effects that racism has on resource allocation and on distribution, the latter not only depicts a broader set of effects. It also accounts for specifically economic circumstances that may determine racism. Given the above outline, the paper identifies two distinct types of ethical implications. First, since the nature of the racism-economy relation depends on whether the economy is assumed to be systemically open or closed, this involves a value judgment about the theoretical premises of the economic inquiry. Second, this methodological choice leads to distinct sets of policy implications. While the types of choices concerning policy are often fairly straightforward, in some cases they lead to moral dilemmas. A particularly important issue that the paper discusses emerges with the open-systems approach and has to do with racial self-identification, which may be a means to contrast racialization but, at the same time, may involve a reassertion of the racial divide.

Virtues, Identity, and Moral Judgment

Rojhat Avsar
,
Columbia College Chicago

Abstract

The paper investigates the relationship among virtuous character, identity, and moral judgement. First: the paper introduces the survey created (by the author) to “measure” how virtuous someone is, in the sense Aristotle used the term. Secondly: the paper discusses the empirical findings as to whether the level of virtue (as measured by the survey) predictive of (i) how the participants in the survey respond to the hypothetical ethical problems posed to them, and (ii) the elements of the participants’ self-reported identities. Lastly: the paper will discuss how the Aristotelian virtue ethics (as interpreted by MacIntyre) could be the basis for policymaking and could mount a subversive challenge to the common-sense status of utilitarianism in Economics

Endogenous Preference and Social Status

Roger A. McCain
,
Drexel University

Abstract

In most of economic theory, and in game theory, preferences are given as data. Thus, on the one hand, preference are exogenous determinants of equilibria, coalition structures, and similar stable social situations; and on the other hand, preferences provide exogenous criteria for normative evaluations of alternative social situations, both on standards of efficiency and fairness. While this is highly coherent and coherence is to be valued in theory, the assumption that preferences are exogenous is empirically doubtful. With respect to income, in particular, surveys indicate the satisfaction of a higher income decreases as the person becomes accustomed to it (Frey and Stutzer 2002). Similarly, adaptation is observed to disability, marriage (Kahneman and Krueger 2006), and seatbelt regulations (Goudiet et al. 2014). Supposing that self-reported well-being is correlated with preference, these results pose troubling questions about the exogeneity of preferences. This is an important consideration for policy. For example, after a policy transition that makes seat belts mandatory, the agent’s preferences may adapt so that the agent is less averse to seat belt use than they were before. It is also important for social status. The essay begins with an ordinary-language sketch of the theory of cooperative games in effectivity function form, a theory that focuses on the ability of a coalition to influence the range of possible outcomes in an interaction. The paper then explores the implications of endogenous preferences, particularly for the formation of coalitions to change social situations by eliminating deprivation.

The Misspecification of Harm in Economics: Overidentification, Underidentification, and Miscategorization

George DeMartino
,
University of Denver

Abstract

For the past century standard economics has mishandled the concept of harm, in at least three ways. First, standard welfare economics overidentifies harm by theorizing all instances of “not-benefiting” as harmful. For instance, the failure to enact a policy that would provide tax cuts to the wealthy counts as harmful. On the other hand, the approach fails to recognize “structural violence” as harmful. Hence, Milton Friedman’s claim that the harm that results from discrimination in markets does not warrant government intervention. Third, the standard approach reduces all economic harm to a loss of welfare. The approach treats all harms as commensurable, and as reparable through monetary transfer. Taken together, the three errors have obstructed attention in the profession to the matter of social stratification. In particular, the errors lead to a toleration of the enjoyment of unwarranted privilege by some and the suffering of persistent deprivation by others.

Reactive and Proactive Environmental Rights: Using Constitutions to Address Climate Change and Environmental Injustices

Chris Jeffords
,
Villanova University

Abstract

Consider Pennsylvania and New York. The former has had an environmental human right embedded in its constitutional Bill of Rights since 1971 while the latter recently amended its constitution in 2021 to include such a right in its respective Bill of Rights. That’s a 50-year difference across two geographically close and, depending on the type of election, politically close (or distant) states. This paper seeks to explore the nature of this “rights gap” across bordering states through an interdisciplinary approach rooted in economics, human rights theory, and moral philosophy. By focusing on the historical context in which each state put forth and constitutionally codified these rights, this analysis will provide insight into the ways in which environmental human rights are both reactive and proactive responses to climate change and environmental injustices. Using a mostly qualitative approach, I will also offer a brief glimpse into the challenges associated with blending disciplines to examine the duties to respect, protect, and fulfill environmental human rights. This includes focusing on the language of each provision, noting that Pennsylvania’s provision is 61 words and New York’s is 15, and the subsequent constraints these stylistically different yet semantically similar provisions impose on individuals, groups, and the state.
JEL Classifications
  • A1 - General Economics
  • B5 - Current Heterodox Approaches