Abstract

In this retrospective for Ethics, I discuss H.M. Oliver’s “Established Expectations and American Economic Policies.” This article, by a then-modestly-famous economist, has been ignored (no citations) since its 1940 publication. Yet it bears directly on a normative problem at the intersection of ethics and economics that challenges today’s policymakers but has received comparatively little philosophical attention: how should we balance potentially desirable institutional change against the disruption of established expectations? Oliver details how the principle of fulfilling established expectations cuts across political lines. Conservatives, he observes, criticized inflation for disrupting expectations, and demanded the protection of established corporations. New Deal progressives achieved “the safeguarding of the economic positions of certain important sections of the American people” (104) via statutes designed to protect income and homeownership status. And labor leaders lobbied for the preservation of occupational status. Oliver criticizes these demands on two grounds. First, they are noncompossible: they can’t simultaneously be fulfilled. Second, they are economically inefficient. He concludes that “in a modern dynamic economy, the preservation of status is not and cannot be a feasible criterion of economic justice” (107). I argue that Oliver accurately recognizes both the wide endorsement and the moral ill-foundedness of fulfilling expectations. However, I criticize Oliver’s belief in the noncompossibility of expectations. The established expectations of the wealthy, middle-class homeowners and retirees, and current workers can all be maintained, but at the price of constricting the opportunities of new graduates, immigrants, and the poor—all groups yet to develop settled expectations. This insight renders the protection of expectations not merely inefficient but also unjust.