An interesting distinction between ethics for the Fairy Land of Economic Theory and conventional ethics for reality is that in the former some of the ethical content is expressed not in normative propositions but in the characteristics of the Fairy Land. I thought of the topic the other day when wondering, as I sometimes do, whether the core ethical proposition of neoclassical welfare economics is that we, the observers, should “maximize” total social “utility” under real conditions, or only under certain unreal conditions.
Recall that “utility” in modern neoclassical welfare economics is all about the expression of preferences, whether defined as preference rank “utility” or inaccessible inner perceptions of satisfaction from preference fulfillment “utility.” If someone with mental illness prefers to throw himself off the astronomy tower under the mistaken belief he will fly, are we meant to agree to let him because it “maximizes” total social “utility,” or not really? If someone prefers to eat an apple we know has been poisoned but she does not, are we meant to agree to let her eat it because it “maximizes” total social “utility,” or not really? If someone has become addicted to some drug and prefers another fix, which we know will likely kill him, are we meant to agree to let him because it “maximizes” total social “utility,” or not really?
One might suppose it would be easy enough to figure out what normative neoclassical welfare economics says. I mean, how else can we evaluate the proposition we should maximize social “utility?” But surprisingly, no, not really. In neoclassical welfare economics, there’s no formal ethical proposition saying we should only “maximize” total social “utility” under a set of arbitrary conditions like people are perfectly rational, fully informed, not manipulated, not addicted, not desperate, etc. However, one might suspect those conditions are built into the structure of the Fairy Land. Can the ciphers, the subjects of Fairy Land, be ignorant, irrational, deluded, manipulated, addicted, desperate, etc.? I’m not entirely sure. Certainly as a condition of “perfectly competitive markets,” we know all about the assumptions of “perfect information” and “perfect rationality.” But what about at the level of just evaluating the normative goal of “maximizing” total social “utility?”
If economists working with normative neoclassical welfare economics were careful ethical philosophers, they would be very clear and rigorous about the conditions under which we’re meant to evaluate the ethical proposition we should “maximize” total social “utility.” But they’re not, and they don’t want to be. They want to be scientists and mathematicians. They don’t care about themselves or anyone else evaluating normative propositions. And that’s really the whole problem with what I sometimes facetiously call positive normative economics. One can’t do proper ethics without clearly specifying the factual premises involved in one’s argument. Real ethics are understood to apply to reality, even if not all characteristics of reality are formally introduced as factual premises. One may fairly bring up considerations that apply in reality. Ethics for an unreal, artificial Fairy Land are different.
Economists want to play with arbitrary mathematical models of their own design, which purveyors of bad economics then use slyly, opaquely, inappropriately, to make dodgy ethical or normative statements about the real world, and many economists simply don’t care. There’s no one really watching what they’re doing, keeping tabs on them, keeping them honest, speaking up for real neoclassical welfare economics. Well, maybe not no one, exactly. A few. But there should be more. If you’re committed to doing normative economics, playing ethical arbiter for society, get serious about philosophy, ethics. If you want to be a scientist, engineer, mathematician, drop the normative content, the ethics, and learn to talk right.
