Economics, Ethics and the Market: Introduction and Applications

by Graafland; Johan J.

• ISBN13: 9780415407700
• ISBN10: 0415407702
• Edition: 1st
• Format: Hardcover
• Copyright: 2006-12-06
• Publisher: Routledge

Summary

The primary aim of the text is to introduce the reader to the relationship between economics and ethics and to the application of economic ethics in the evaluation of the market. The reader will gain insight into: * The ethical and methodological strategy of economics and criticism of the core assumptions that underpin the economic defense of free market operation. * The characteristics of different ethical theories (utilitarianism, duty and rights ethics, justice and virtue ethics) that can be used to evaluate the free market. * How to apply economics in conjunction with ethical theories to evaluate economic trends and policies that promote the free operation of the market and are subject to public debate. These insights will help to develop the reasoning and analytical skills needed to criticize economic analysis as well as to apply ethical concepts to moral issues in economic policy.

Author Biography

Johan J. Graafland is Professor of 'Economics, Business and Ethics' and Director of the Center for Corporate Social Responsibility at the Faculty of Philosophy of Tilburg University, the Netherlands.

Table of Contents

List of figures	xiii
List of tables	xiv
Preface	xv
Introduction	1	(28)
Economics and ethics	2	(9)
Defense and critique of the free market	11	(8)
Purpose and plan of the book	19	(10)
PART I Markets and economics	29	(118)
The theory of perfect markets	31	(29)
Pareto optimality, welfare theory and perfect competition	32	(3)
Conditions for perfect competition	35	(2)
Market imperfections	37	(6)
The role of the government	43	(4)
Corporate social responsibility and the reputation mechanism	47	(4)
An alternative paradigm: Marxian economics	51	(9)
Rationality	60	(24)
Conditions for rationality	61	(4)
Bounded rationality	65	(10)
Commitments and procedural rationality	75	(7)
The role of the government	82	(2)
Self-interest and social preferences	84	(24)
Consumerism	86	(1)
Adam Smith on sympathy	87	(9)
Altruism, reciprocity, fairness and commitment to common goals	96	(5)
Social preferences and economic efficiency	101	(7)
Status goods, non-satiation and happiness	108	(23)
Preference drifts from social interaction	110	(7)
Habit formation and interaction between capacity and needs	117	(3)
Does welfare make us happier?	120	(8)
Conclusion	128	(3)
Economics as an inexact science	131	(16)
Methodological individualism	132	(1)
The hypothetico-deductive approach	133	(2)
Inexactness of the hypothetico-deductive approach	135	(8)
Deductive versus inductive method	143	(1)
Economics as a cultural science	144	(3)
PART II Markets and ethics	147	(122)
Utilitarianism and welfare theory	149	(24)
Characteristics of utilitarianism	150	(5)
Pareto optimality and cost-benefit analysis	155	(4)
Problems with utilitarianism	159	(9)
Adaptations of utilitarianism	168	(3)
Conclusion	171	(2)
The ethics of duties and rights	173	(21)
Consequential and deontological ethical theories	173	(2)
Ethics of duty: Immanuel Kant	175	(6)
Rights ethics: the libertarian view	181	(7)
Real freedom and positive rights	188	(6)
The ethics of justice	194	(31)
The concept of justice	195	(2)
The theory of justice of Rawls	197	(11)
The entitlement theory of Nozick	208	(8)
Distributive justice: an overview of criteria	216	(6)
Justice and private property rights	222	(3)
Virtue ethics and care ethics	225	(28)
The virtue ethics of Aristotle	226	(8)
The virtue ethics of Adam Smith	234	(6)
The ethics of care	240	(2)
The impact of virtues on market operation	242	(2)
The impact of market operation on virtues	244	(9)
Overview	253	(16)
Liberalism	254	(3)
Communitarianism	257	(5)
Applying different ethical theories: a framework	262	(7)
PART III Applications	269	(127)
Towards more labor market participation by parents?	271	(14)
Division of work between spouses: four stylized models	272	(1)
Utilitarian evaluation: externalities and bounded rationality	273	(4)
Rights, justice, virtues and care	277	(3)
Overview and evaluation	280	(5)
Reforms of the pension system and solidarity	285	(19)
The concept of solidarity: justice or community?	287	(1)
How pension reforms impinge on solidarity	288	(5)
State pensions and justice: an evaluation	293	(8)
Conclusion	301	(3)
Cosmetic surgery, utility and freedom	304	(14)
Cosmetic surgery, market imperfections and utility	305	(4)
Freedom and the beauty ideal	309	(3)
The practice of cosmetic surgeons and virtues	312	(4)
Conclusion	316	(2)
More economic freedom, less collective rest?	318	(12)
Christian ethics, liberalism and communicatarianism	319	(3)
The Christian view on collective rest	322	(3)
The liberal view	325	(2)
Conclusion	327	(3)
Does ICT foster well-being?	330	(16)
Utilitarian evaluation: market imperfections and bounded rationality	330	(4)
Rights and justice	334	(3)
Community and ICT	337	(6)
Overview	343	(3)
Ethical questions about globalization	346	(19)
Persistence of market imperfections	348	(4)
Justice	352	(6)
Human rights	358	(3)
Solidarity and cultural diversity	361	(2)
Conclusion	363	(2)
World poverty and the duty to aid	365	(15)
Development aid and economic growth	366	(3)
A moral duty to development aid?	369	(7)
Complications	376	(1)
Conclusion	377	(3)
Toward an economics of enough?	380	(12)
Structural problems	380	(2)
Economic growth as a rule of thumb	382	(1)
Criticism of neoclassical economics	383	(2)
Toward an economics of enough	385	(2)
Evaluation	387	(5)
Conclusion	392	(4)
Notes	396	(14)
References	410	(14)
Index	424