Economic Analysis, Moral Philosophy and Public Policy / Edition 2

Economic Analysis, Moral Philosophy and Public Policy / Edition 2

by Daniel M. Hausman, Michael S. McPherson
     
 

ISBN-10: 0521846293

ISBN-13: 9780521846295

Pub. Date: 03/28/2006

Publisher: Cambridge University Press

This 2006 book shows through accessible argument and numerous examples how understanding moral philosophy can improve economic analysis, how moral philosophy can benefit from economists' analytical tools, and how economic analysis and moral philosophy together can inform public policy. Part I explores rationality and its connections to morality. It argues that in

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Overview

This 2006 book shows through accessible argument and numerous examples how understanding moral philosophy can improve economic analysis, how moral philosophy can benefit from economists' analytical tools, and how economic analysis and moral philosophy together can inform public policy. Part I explores rationality and its connections to morality. It argues that in defending their model of rationality, mainstream economists implicitly espouse contestable moral principles. Part II concerns welfare, utilitarianism and standard welfare economics, while Part III considers important moral notions that are left out of standard welfare economics, such as freedom, rights, equality, and justice. Part III also emphasizes the variety of moral considerations that are relevant to evaluating policies. Part IV then introduces technical work in social choice theory and game theory that is guided by ethical concepts and relevant to moral theorizing. Chapters include recommended readings and the book includes a glossary of relevant terms.

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Product Details

ISBN-13:
9780521846295
Publisher:
Cambridge University Press
Publication date:
03/28/2006
Edition description:
REV
Pages:
354
Product dimensions:
5.98(w) x 8.98(h) x 0.83(d)

Table of Contents

Prefaceix
Introduction1
1Ethics and Economics?3
1.1What Are Moral Questions and How Can They Be Answered?4
1.2How Is Moral Philosophy Relevant to Economics?8
1.3Organization10
2Ethics in Welfare Economics: Two Examples12
2.1A Shocking Memorandum12
2.2Eight Distinctive Features of Welfare Economics13
2.3The Economic Benefits of Exporting Pollution to LDCs16
2.4Summers's Argument and a Further Feature of Welfare Economics17
2.5Is Summers Right? Should the World Bank Encourage Migration of Dirty Industries to LDCs?20
2.6School Vouchers23
2.7Conclusions29
3Ethics in Positive Economics: Two Examples30
3.1Is Unemployment Involuntary?31
3.2Overlapping Generations38
3.3Conclusions41
IRationality and Morality43
4Rationality45
4.1Certainty and Ordinal Utility Theory46
4.2Expected Utility Theory51
4.3Questions about Utility Theory55
5Rationality in Positive and Normative Economics60
5.1Rationality and Positive Economics60
5.2Preference Satisfaction and Pareto Efficiency64
5.3Rationality and Ethics in Positive Economics67
5.4Self-Interest and Moral Motivation72
5.5Conclusions76
6Rationality, Norms, and Morality78
6.1Rationality and Self-Interest79
6.2The Influence of Moral Norms on Economic Behavior80
6.3How Do Norms Motivate and What Sustains Them?85
6.4Philosophical Implications89
6.5Morality and Utility Theory91
6.6Conclusion: On the Rationality of Morality94
IIWelfare and Consequences97
7Utilitarianism and Consequentialism99
7.1Clarifying Utilitarianism100
7.2Interpersonal Comparisons of Well-Being104
7.3Justifying Utilitarianism107
7.4Contemporary Consequentialism109
7.5Is Utilitarianism Plausible?112
7.6Consequentialism and Deontology113
7.7Conclusion: Should Economists Embrace Utilitarianism?116
8Welfare118
8.1Theories of Well-Being119
8.2Is the Standard View of Welfare Plausible?120
8.3Equating Well-Being and Preference Satisfaction122
8.3.1Changing and Conflicting Preferences and Preferences Based on False Beliefs123
8.3.2Assessing Preferences125
8.4Modifying the Preference Satisfaction View128
8.5Alternative Theories of Welfare129
8.6Conclusions133
9Efficiency135
9.1"Efficiency" as Pareto Optimality136
9.2How Welfare Economics Narrows Normative Questions140
9.3Cost-Benefit Analysis144
9.4Objections to Cost-Benefit Analysis147
9.5Cost-Benefit Analysis as a Social Practice151
9.6Conclusion: Welfare Economics in Limbo152
IIILiberty, Rights, Equality, and Justice157
10Liberty, Rights, and Libertarianism159
10.1Freedom160
10.2What Are Rights?163
10.3The Importance of Rights164
10.4The Justification of Rights166
10.5Weighing Rights, Liberties, and Welfare167
10.6Libertarianism168
11Equality and Egalitarianism174
11.1Why Equalize?177
11.1.1Equality Is Intrinsically Good178
11.1.2Equality and Priority for the Worst-Off179
11.1.3Intrinsic Connections between Equality and Other Ends181
11.2Equality of What?183
11.2.1Equality of Welfare184
11.2.2Equality of Resources185
11.2.3Equality of Opportunity for Welfare190
11.2.4Equality of Capabilities191
11.3Complex Equality and Equality of Moral Status192
11.4The Measurement and Importance of Inequality195
12Justice and Contractualism198
12.1The Social Contract Idea199
12.2Justice as Reciprocity: Rawls's Theory of Justice201
12.2.1Contractualism and the Original Position202
12.2.2Rawls's Principles of Justice203
12.2.3Implications of Rawls's Principles206
12.2.4Justice and Pluralism207
12.3Justice as Mutual Advantage: David Gauthier209
12.4Other Contractualist Views211
12.5Conclusion: Social Contract Reasoning and Economics212
IVMoral Mathematics215
13Social Choice Theory217
13.1The Social Welfare Function and Arrow's Theorem217
13.2The Interpretation of Arrow's Theorem220
13.3Social Choice Theory and Moral Philosophy222
13.4The Paradox of the Paretian Liberal225
13.5The Range of Social Choice Theory228
13.5.1The Logical Coherence of Social Judgments228
13.5.2Formal Representations of Freedom and Opportunity228
13.5.3Should Egalitarians Aim to Equalize Welfare?230
13.6Conclusions232
14Game Theory234
14.1What Is a Game?234
14.2Moral Philosophy and Some Simple Games239
14.3Cooperation and Justice243
14.4Paradoxes and Difficulties245
14.5Bargaining Theory and the Social Contract251
Conclusions257
15Pollution Transfers and School Vouchers: Normative Economics Reconsidered259
15.1Do Vouchers and Pollution Transfers Make People Better-Off?261
15.2A Utilitarian Perspective on Pollution Transfers265
15.3Other Ways of Evaluating Vouchers and Pollution Transfers267
15.3.1Rights, Freedoms, Pollution, and Vouchers267
15.3.2Equality, Pollution, and Vouchers268
15.3.3Justice, Pollution, and Vouchers269
15.4Conclusions272
16Economics and Ethics, Hand in Hand274
16.1Involuntary Unemployment and Moral Baselines274
16.2The Overlapping Generations Example278
16.3Pressing Problems279
16.3.1Ethnic and Religious Conflict281
16.3.2Global Inequalities283
16.3.3Environmental Protection and Global Warming285
16.4Conclusions289
AppendixHow Could Ethics Matter to Economics?291
A.1Objection 1: Economists as Engineers292
A.2Objection 2: Positive Economics Is Value Free295
A.2.1Positive and Normative Economics296
A.2.2On the Independence of Ethics and Economics297
A.3The Rationality of Normative Inquiry297
A.4How Knowing Ethics Contributes to Positive Economics299
A.5Conclusions306
Glossary309
References315
Index335

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