9 Nov 2010

Economics and Ethics?

by David Ruccio

Economics and ethics. OK, so they’re not two words that are often mentioned in the same breath. Not after the Chicago Boys in Chile. Or Jeffrey Sachs’s “shock therapy” in Bolivia and Andrei Shleifer’s financial shenanigans in Russia. Or, most recently, the role of economists leading up to the financial crisis, as exposed in Charles Ferguson’s Inside Job.

As Nancy Folbre explains, there’s a good reason why there’s little discussion of ethics in relation to economics.

We expect academic researchers who are in a position to influence public opinion to divulge possible conflicts of interest, especially direct financial ties to individuals or organizations that stand to gain from their influence.

Many professional groups, including the American Statistical Organization and the American Sociological Organization, have formulated official codes of ethics to describe, among other things, specific conditions under which conflicts of interest should be reported. Such codes do not carry the force of law, but they establish normative guidelines for withdrawal of professional respect.

The American Economic Association stands out for its lack of any official ethics code. Sadly, some of its members seem to be in dire need of one.

There is no Hippocratic Oath in economics, not even a minimal “do no harm.” Fortunately, George DeMartino has a forthcoming book on the topic. In The Economist’s Oath, DeMartino both demonstrates the errors committed by economists in the absence of an ethical code and shows how economics education will have to changed in order to develop an ethical awareness among practicing economists.

Based on talks I’ve heard DeMartino give on the topic, his book can’t come out too soon. In the meantime, maybe we should just stop neoclassical economists from plying their trade until they’ve adopted the Economist’s Oath.

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