"When philosophy paints its grey in grey then has a shape of life grown old. By philosophy's grey in grey it cannot be rejuvenated but only understood. The owl of Minerva spreads its wings only with the falling of dusk." -- G.W.F. Hegel, 'Preface', Philosophy of Right.
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'Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainity and agitation distinquish the bourgeois epoch from all earlier ones ... All that is solid melts into air, all that is holy is profaned.' Marx
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ethics + economics
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September 12, 2010
In The Ethics of Economic Rationalism John Wright highlights a distinction between economic rationalism and neo-liberalism. Though both ‘economic rationalists’ and ‘neo-liberals’ argue that governments should reduce their own activities and leave as much as possible up to the free market, Wright points out that:
when they come to explain why they think governments ought to do this, economic rationalists and neo-liberals might give rather different answers. The economic rationalist will emphasise the role that the free market has in increasing efficiency and creating wealth. But a neo-liberal might instead emphasize the ways in which, by cutting back on their own activities, governments can thereby maximise the liberty of their citizens. The economic rationalist will emphasis efficiency, the neo-liberal freedom (p. 18).
We can tie the two strands together in that if the aim of economic rationalism is to maximise economic efficiency, then the best way to maximise economic efficiency is by leaving as much as possible up to the free market.
In this discussion on the discussion on the Philosophers Zone it is stated that economic rationalists want to get society as close as possible to an ideal market and ideal markets, by definition, for economic rationalists, maximise welfare. Is that a moral good?
Wright says:
Well, not necessarily. Maximising welfare, if this is taken to mean maximising wealth, then it's not entirely clear, or at least more argument needs to be done to show that this is a moral justification or an ethical justification. Now one kind of ethical justification that perhaps most immediately springs to mind is something along the following lines: that if you've got an ideal market, then welfare will be maximised, and if welfare is maximised, or wealth is maximised, then people will be happier, the greatest happiness for the greatest number will occur when welfare is maximised, and if you've got the greatest happiness for the greatest number, then at least on a utilitarian perspective, which actually sees the best, the morally best perspective, or some versions of utilitarianism see the morally best perspective as the one in which there is the greatest happiness for the greatest number. Then in those circumstances it's plausible to think you would have an ethical justification for economic rationalism.
The ethics is straightforwardly utilitarian. The problem here is that even if ‘economic rationalism’ maximises total wealth, it tends to increase the gap between rich and poor, and it fails to ensure that those at the lowest economic levels of society enjoy a satisfactory standard of living. It makes it harder to ensure that we can obtain other aspects of life that are also of value, such as security and freedom from stress, and a balanced life that includes enough time for leisure, hobbies, and relationships.
Wright adds that:
Economic rationalism involves maximising economic efficiency. It involves trying to get society as close as practicable to an ideal market, and this may involve doing things like eliminating public goods, so that for example, things that were previously done by governments are done by free enterprise. Now this type of thing is different from letting society run on its own. It's changing society with the aim of maximising economic efficiency, and it can have these unforeseen consequences that conservatives were concerned about.
Wright argues that if ‘economic rationalism’ does add to overall wealth, it takes away from justice, from fairness, and from many aspects of the quality of life.
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| | Posted by Gary Sauer-Thompson at 11:13 AM | Permalink |
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