3 - The ethics of economics

Summary

The central problem that I identify in antitrust is that it punishes actions that, although they may create harm, do not involve any wrongdoing. For instance, Raju Parakkal and Sherry Bartz-Marvez write that antitrust law “is primarily intended to restrain large firms from engaging in anticompetitive behavior that is not only detrimental to other firms but for the most part deleterious to the interests of consumers across the economy.” Like similar statements quoted earlier, this addresses the negative consequences of anticompetitive behavior, but makes no reference to any moral wrongdoing. The underlying idea is that all harm is equally problematic and needs to be minimized (or optimized with respect to benefit), regardless of any consideration of whether the actions that brought them about are wrongful in the sense of violating rights.

This is an intrinsic, pervasive, but largely unacknowledged problem with mainstream economics in general—and ultimately a legacy of its roots in the moral philosophy known as utilitarianism, with which we begin this chapter examining the ethical foundations of economics. After introducing the basic tenets of utilitarianism and explaining how they relate to economics, I’ll discuss the implications of their neglect of meaningful rights, turning to another school of ethics to fill that gap before we discuss rights in more detail in the next chapter.

Utilitarianism

The basic concept of utilitarianism can be traced back to antiquity, but its most well-known and modern presentation is due to the philosopher Jeremy Bentham, with important elaboration done by philosopher and economist John Stuart Mill. Both men were reformers who recommended utilitarianism as a tool for social betterment through government policy and law, as well as a way of individuals to live an ethical life. In its most basic form, utilitarianism focuses on maximizing the total happiness, well-being, or utility of the members of a group or society. As such, it is a specific form of consequentialism, the general term for any ethical system that places moral value on the results or outcomes of actions, rather than those that focus on the moral status of actions themselves (such as deontology) or the character of the persons performing them (such as virtue ethics).