Teaching economic harm to economists, in three diagrams

George DeMartino

Chapter 3 in Handbook of Teaching Ethics to Economists, 2023, pp 34-47 from Edward Elgar Publishing

Abstract: Economists necessarily cause harm as they promote social betterment. But rather than confront the problem responsibly, standard economics training trivializes the harms that befall individuals and their communities as a consequence of economic policy that economists advocate. Unlike other professions that induce harm, standard welfare economics embraces what I refer to as “moral geometry” that reduces very complex moral problems to welfarist decision rules involving simple mathematical problems. These include Kaldor-Hicks and the associated CBA, and the use of social welfare functions (SWFs). These decision rules are appropriate only in cases where all harms are reparable through monetary compensation. But they are inappropriate in very many of the cases where they are in fact employed. The latter includes cases where there are irreparable harms - such as the loss of irreplaceable goods - and where harms occur that, though potentially reparable, are not reparable through compensation. In cases like these, moral geometry fails. For instance, trade liberalization induces increased morbidity, mortality, and addiction; domestic and other forms of violence; social isolation, and a loss of self-respect and political agency - to name just some of the harms that befall communities affected by dis-investment following liberalization. Many of these harms are irreparable, and non-compensable. And yet, trade liberalization continues to be advocated by trade economists on welfare grounds, relying on moral geometry. Economists must be trained to recognize that very many of the policy initiatives they have reason to advocate are not appropriately justified by moral geometry.

Keywords: Economics and Finance; Teaching Methods; General Academic Interest (search for similar items in EconPapers)
Date: 2023
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