Tyler Cowen has an article in the New York Times about the egalitarian tradition of economics. It appears to be a genuine effort to promote economic analysis and rationale as THE tool for social analysis, since it is the only value-free objective way to look at society. My experience in the profession has given me strong reasons not to be easily convinced. The very fact that most economists I know have linked to the article with ringing endorsements sheds some light on how economists perceive their role.
In fact economics has a very distinct moral alignment, and even the basic notion of utility merely reflects an individual’s interpretation of contemporary morals.
Economic analysis is itself value-free, but in practice it encourages a cosmopolitan interest in natural equalityWhat is “natural equality”? No seriously. What is it?
Many economic models, of course, assume that all individuals are motivated by rational self-interest or some variant thereof; even the so-called behavioral theories tweak only the fringes of a basically common, rational understanding of people. The crucial implication is this: If you treat all individuals as fundamentally the same in your theoretical constructs, it would be odd to insist that the law should suddenly start treating them differently.
Behavioural theories that economists themselves accept could be considered minor tweaks - by definition the discipline won’t accept a rewrite of their fundamental belief structure. A genuinely objective, or value-free, observer of the behavioural tradition would reject the notion of rational self-interest, especially rationality as defined by consumer theory.
And the classical economists Jeremy Bentham and John Stuart Mill promoted equal legal and institutional rights for women long before such views were fashionable. Their utilitarian moral theories placed individuals on a par in the social calculus by asking about the greatest good for the greatest number.
Bentham and Mill didn’t support personal liberty in every instance — Mill was a proud imperialist when it came to India, and Bentham’s idea for a Panopticon prison was a model of state-sponsored surveillance. But they prepared the way for dissecting the prevailing defenses of hierarchy and injustice.
So basically if you look hard you can find instances where economists historically appeared to be value-free or egalitarian, but if you look even harder you realise that this is chance, and you are equally likely to find the opposite.
Gary Becker, the Nobel laureate who is one of the founders of this approach, used the economic method to lay bare the selfish motives behind racial and ethnic discrimination.
In my view Thomas Schelling was perhaps more influential in this area, but of course doesn’t identify as an economist, so his ideas can be dismissed. Also, Becker’s model “often includes a variable of taste for discrimination in explaining behavior”. So if people have a taste for it, they derive utility, the economic answer is that discrimination is good.
The obvious but too-often-underemphasized reality is that immigration is a significant gain for most people who move to a new country.
In fact the key point of the whole article is in the following two paragraphs
In any case, there is an overriding moral issue. Imagine that it is your professional duty to report a cost-benefit analysis of liberalizing immigration policy. You wouldn’t dream of producing a study that counted “men only” or “whites only,” at least not without specific, clearly stated reasons for dividing the data.
So why report cost-benefit results only for United States citizens or residents, as is sometimes done in analyses of both international trade and migration? The nation-state is a good practical institution, but it does not provide the final moral delineation of which people count and which do not. So commentators on trade and immigration should stress the cosmopolitan perspective, knowing that the practical imperatives of the nation-state will not be underrepresented in the ensuing debate.