Liberals have often been attracted by contractarian modes of argument— and with good reason. Any system of social organization requires that some constraints be imposed on individuals' freedom of action; it is a central problem for any liberal political theory to show which constraints can be justified, and which cannot. A contractarian justification works by showing that the constraints in question can be understood as if they were the product of an agreement, voluntarily entered into by every member of society. (...) Thus, no one is required to give up his freedom for someone else's benefit, or in the pursuit of someone else's conception of the social good. (shrink)

We revisit classical Utilitarianism by connecting and generalizing two ideas. The first is that there is a representation theorem possible for hedonic value similar to, but also importantly different from, the one provided by von Neumann and Morgenstern to measure decision utility. The idea is to use objective time, in place of objective chance, to measure hedonic value. This representation for hedonic value delivers a stronger kind of scale than von Neumann–Morgenstern utility, a ratio scale rather than merely an interval (...) scale. The second idea is that measurement on a ratio scale allows the meaningful aggregation of utilities over a group. This is aggregation by product rather than sum. Aggregation by product is known to have interesting Prioritarian consequences. Aggregation becomes complicated when the two approaches are mixed, when hedonic value is mixed with uncertainly. It becomes problematic when pain as well as pleasure is taken into account. (shrink)

I examine the foundations of a just society using the lens of decision theory. The conception of just society is from an individual’s viewpoint: where would I rather live if I have an equal chance of being any individual? Three alternative designs for a just society are examined. These are: laissez-faire, maximin and social minimum. Two assumptions about human nature clarify the distinction among three societies. The first assumption is that a representative individual’s utility function is concave. The second assumption (...) recognizes that redistribution to achieve equality reduces total wealth. A rational individual would prefer a society where one is free to maximize one’s expected utility. A social minimum that includes both the provision of essential human needs and equality of opportunity (education, healthcare, access to capital) for a flourishing life emerges as a candidate solution for the basic structure of society. (shrink)

This study addresses a fundamental concern of research on economic ethics by examining the values of economics. While other studies have linked the study of economics to the adoption of rational economic behavior, this study goes one level deeper, investigating the values that underpin neoclassical economics and whether they are transmitted to students. We find that the study of economics is associated with an increase in hedonism and power values, a decrease self-direction value, and possibly a decrease in universalism value. (...) We measure value change among economics students using a quasi-experimental research design in accordance with the methodology of research on academic socialization. We discuss the practical implications of the internalization of economic values. (shrink)

This essay examines the administrative state as a ubiquitous phenomenon that results in part from the mismatch of incentives. Using two dramatic episodes in the history of economics, the essay considers two types of mismatch. It then examines how economists increasingly endorsed the “general good” as a unitary goal for society, even at the expense of private hopes and desires. More than this, their procedures and models gave them warrant to design mechanisms and advocate for legislation and regulations to “fix” (...) the supposedly suboptimal choices of individuals in service to the overarching goal. The rise of New Welfare Economics dealt an additional blow to the sovereignty of individual motivations, notwithstanding that Hayek and Buchanan warned that this engineering approach allowed social goals to override individual preferences. Throughout, the argument is that it is important to recognize that people within or advising the administrative state are influenced by the same sorts of motivations as actors throughout the economy. (shrink)

After reviewing the compelling case for separability (`social welfare is a separable function of individual utilities'), an argument is advanced for utilitarianism (defined as `social welfare is the unweighted sum of individual utilities'). Basically, a compelling individualism-type axiom leads us to (social welfare as an) unweighted sum (of individual utilities), given separability.

Many utilitarians accept Bentham's view that to argue for the principle of utility is as ‘impossible as it is needless'. They take utilitarianism as a first principle which one either accepts or does not. They do, of course, defend utilitarianism against objections, and make objections to other ethical positions; but the principle of utility itself, they hold, must stand on its own merits. In this article we use a different approach. We introduce a principle, which we call ‘Weak Majority Preference', (...) which we believe likely to be accepted by many who do not consider themselves utilitarians. We then show that from this principle it is possible to derive the general principle of utility. (shrink)

Modelling became one of the primary tools of mathematical economic research in the twentieth century, but when we look at examples of how nonanalogical models were first built in economics, both the process of making representations and aspects of the representing relation remain opaque. Like early astronomers, economists have to imagine how the hidden parts of their world are arranged and to make images, that is, create models, to represent how they work. The case of the Edgeworth Box, a model (...) widely used for theoretical work in twentieth-century economics, provides a good example to explore the process of making mathematical representations of the economy. It shows how, in making these new representations, conceptual elements were developed which could not have been represented in the older verbal forms of economics. (shrink)

We identify a normative paradox of responsible management education. Business educators aim to promote social values and develop ethical habits and socially responsible mindsets through education, but they attempt to do so with theories that have normative underpinnings and create actual normative effects that counteract their intentions. We identify a limited conceptualization of freedom in economic theorizing as a cause of the paradox. Economic theory emphasizes individual freedom and understands this as the freedom to choose from available options. However, conceptualizing (...) individuals as profit-maximizing actors neglects their freedom to reflect on the purposes and goals of their actions. We build on the work of pragmatist philosopher John Dewey, who distinguishes between habitualized and creative problem-solving behaviors, conceptualizes knowledge construction as a process of interdependent scientific social inquiry, and understands actors as having the freedom to determine what kind of people they wish to be. We apply pragmatist theory to business education and suggest equipping students with a plurality of theories, supplementing neoclassical economics with other economic perspectives and views from other disciplines on economic behavior. Moreover, we suggest putting students into learning situations that require practical problem solution through interdependent social inquiry, encouraging ethical reflection. In doing so, we contribute by linking the problematic conceptions of freedom identified in economic theorizing to the debate on responsible management education. We conceptualize a pragmatist approach to management education that explicitly re-integrates the freedom to discursively reflect on the individual and societal purpose of business activity and thereby makes existing tools and pedagogies useful for bringing potential freedom back into business. (shrink)

Is rhetoric just a new and trendy way toépater les bourgeois?Unfortunately, I think that the newfound interest of some economists in rhetoric, and particularly Donald McCloskey in his new book and subsequent responses to critics, gives that impression. After economists have worked so hard for the past five decades to learn their sums, differential calculus, real analysis, and topology, it is a fair bet that one could easily hector them about their woeful ignorance of the conjugation of Latin verbs or (...) Aristotle's Six Elements of Tragedy. Moreover, it has certainly become an academic cliché that economists write as gracefully and felicitously as a hundred monkeys chained to broken typewriters. The fact that economists still trot out Keynes's prose in their defense is itself an index of the inarticulate desperation of an inarticulate profession. (shrink)

This analysis maps the deepening global crisis and the principles of its resolution by life-value analysis and method. Received theories of economics and justice and modern rights doctrines are shown to have no ground in life value and to be incapable of recognizing universal life goods and the rising threats to them. In response to this system failure at theoretical and operational levels, the unifying nature and measure of life value are defined to provide the long-missing basis for understanding the (...) common interest, human rights and social justice—that is, the universal life necessities of humanity across cultures and the evolving civil commons infrastructures to ensure them. In contrast, the treaty-imposed corporate rights system miscalled “globalization” is structured to predate life means and support systems at all levels with no accountability beyond itself. Only the logic of life value, human rights and life-protective law, it is concluded, can comprehend or govern this inherently life-blind and cumulatively eco-genocidal regime. (shrink)

This analysis maps the deepening global crisis and the principles of its resolution by life-value analysis and method. Received theories of economics and justice and modern rights doctrines are shown to have no ground in life value and to be incapable of recognizing universal life goods and the rising threats to them. In response to this system failure at theoretical and operational levels, the unifying nature and measure of life value are defined to provide the long-missing basis for understanding the (...) common interest, human rights and social justice—that is, the universal life necessities of humanity across cultures and the evolving civil commons infrastructures to ensure them. In contrast, the treaty-imposed corporate rights system miscalled “globalization” is structured to predate life means and support systems at all levels with no accountability beyond itself. Only the logic of life value, human rights and life-protective law, it is concluded, can comprehend or govern this inherently life-blind and cumulatively eco-genocidal regime. (shrink)

This study examines the system-deciding principle of economic rationality for its logical soundness and effects in global practice. Analysis demonstrates the fallacious structure of the underlying assumptions of homo economicus across theories and institutions, and explains how cumulative destruction of global economic, social, and ecological life systems follows from its life-blind mechanism. Higher-order concepts of life-capital, life-value efficiency, and life-good supply and demand are then defined to bring economic rationality into coherence with terrestrial and human life requirements.

The Nash-Harsanyi theory of bargaining is usually taken as the correct theory of rational bargaining, and, as such, as the correct theory for the basic political contract for a society. It grafts a theory of cooperation to a base that essentially articulates the perspective of non-cooperative interaction. The resultant theory is supposed make clear how rational bargaining can fully realize the mutual gains that cooperation can make possible. However, its underlying commitment to the concepts of non-cooperative interaction renders this doubtful. (...) I argue for an alternative theory—the theory of Full Cooperation—that avoids this difficulty. As applied to bargaining over the basic political contract, it calls for the selection of the most egalitarian of the Strictly Pareto-Optimal outcomes. This is essentially a version of Rawls’ principle of Justice as Fairness, but it is derived, unlike Rawls’ theory, without appeal to a problematic theory of individual decision-making behind the veil of ignorance. It also provides an alternative basis for what Hart calls the Principle of Mutual Restrictions, and what Rawls’ calls the Duty of Fair Play. (shrink)

Financial misconduct has come into the spotlight in recent years, causing market regulators to increase the reach and severity of interventions. We show that at times the economic benefits of illicit financial activity outweigh the costs of litigation. We illustrate our argument with data from the US Securities and Exchanges Commission and a case of investment misconduct. From the neoclassical economic paradigm, which follows utilitarian thinking, it is rational to engage in misconduct. Still, the majority of professionals refrain from misconduct, (...) foregoing economic rewards. We suggest financial activity could be reimagined taking into account intrinsic and prosocial motivations. A virtue ethics framework could also be applied, linking financial behavior to the quest for moral excellence and shared flourishing. By going beyond utilitarian thinking and considering alternative models, we offer a fuller account of financial behavior and a better perspective from which to design deterrence methods. (shrink)

Edgeworth's original mathematical formalization of utilitarianism as presented in his works of 1877–81 illustrates an intriguing phase in the mutually intertwined history of economics and utilitarianism. In this article I analyse Edgeworth's motivations and point to its interesting implications. In particular, it is pointed out that the starting point of Edgeworth's project had little to do with the field of economics, but formed part of an attempt to present utilitarianism in the most scientific way possible; an attempt made in the (...) context of intensive dispute between the three opposing camps in the field of ethics at the time. Nevertheless, the project concluded with the monograph Mathematical Psychics (1881) that embodied an original relationship between economics and utilitarianism. (shrink)

“Utility,” in plain English, means usefulness. In Australia, a ute is a useful vehicle. Jeremy Bentham specialized the meaning to a particular sort of usefulness. “By utility,” he said, “is meant that property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness or to prevent the happening of mischief, pain, evil, or unhappiness to the party whose interest is considered”. The “principle of utility” is the principle that actions are to be judged by their usefulness (...) in this sense: their tendency to produce benefit, advantage, pleasure, good, or happiness. When John Stuart Mill spoke of the “perfectly just conception of Utility or Happiness, considered as the directive rule of human conduct,” he was using “Utility” as a short name for this principle. “The greatest happiness principle” was another name for it. People who subscribed to this principle came to be known as utilitarians. (shrink)