Are Economists Basically Immoral?

Paul Heyne was a giant among economic educators, an exemplar of what Thomas Sowell called “the constrained vision,” and the author of a seminal text that aims to teach students The Economic Way of Thinking. In the book Are Economists Basically Immoral? editors Geoffrey Brennan and A. M. C. Waterman assemble essays on the intersection of economics, ethics, and religion. In their words, Heyne “was a man with a prophetic mission — something he naturally conceived as a calling” to communicate economic ideas (p. xxiii).  It is an important contribution to the Great Conversation that should be on the shelf of economists, ethicists, and religious leaders worldwide.

From the first page of the first essay, Heyne lays out the indispensability of the economic way of thinking. His message to economists is that there is more than prudence in the beginnings of classical political economy. His message to ethicists and religious leaders is that their pronouncements on economic policy necessarily have to take economic theory and evidence seriously. Heyne is a thoroughgoing Hayekian, and he notes in the text that he is heavily influenced by Hayek’s ideas. His original contribution originates in his application of Hayek’s insights about knowledge to ethical problems, and Hayek’s influence is apparent throughout the text.

For example, Heyne argues that the ethicist/moralist/market skeptic suffers from what Hayek called The Fatal Conceit: “The widespread moral suspicion, if not outright disapproval, of economists and economic analysis is rooted, I believe, in the fact that economists specialize in the analysis of social systems that no one controls and that produce results that no one intended” (p. 5).  A spontaneous order confronts ethicists/moralists as something alien, as something external to themselves, and as something they cannot fully comprehend. They question the apparent chaos of the market’s cash nexus. As Heyne explains it, it appears that their fear of the unknown (and unknowable) explains their distrust of the market economy and their enthusiasm for planning. On page 38, Heyne argues that those “who object to capitalism on the grounds that it is based on or even that it encourages selfishness or materialism only prove, to me at least, that they have not paid close attention to the system they claim to be criticizing.” 

This is a theme that has gotten more attention. Daniel Klein (2005) has written on what he calls “the people’s romance,” which is the conviction that government action as such is valuable and important. Or, to modify a phrase from Chris Hedges (2003), the people’s romance says that government is a force that gives us meaning, particularly those among us who fancy ourselves qualified to usurp others’ discretion. I suspect Heyne would agree. He argues (pp. 79-80) that “the myth of the benevolent despot satisfies the vanity of the ‘man of system.'” Unfortunately, the benevolent (?) designs of the men and women of system have undergirded some of history’s greatest human tragedies.

Heyne also offers explicitly Hayekian criticisms of the idea of “economic justice.” In passages reminiscent of Sowell (2007), he argues that justice is a process characteristic of a social system rather than an outcome (p. 9, for example). Economic justice as a subset of social justice is both incoherent and impractical. First, there is the fact that economic outcomes cum social phenomena are not outcomes that one person does to another. Thus, no specific “injustice” can be identified.  Second, Heyne notes that the problem of ensuring “social justice” is beyond the ken of any individual social planner or any committee of planners.

To Heyne, the Christian critique of capitalism is not necessarily a critique of the capitalist system as such but a critique of homo economicus, the assumption of rational, self-interested, utility-maximizing man (p. 49).  Theologians, he argues, are attracted to anti-capitalist economic heterodoxy because of its rejection of the mainstream’s fundamental assumptions.  Under capitalist institutions, as economics has shown repeatedly, the public wealth is a happy by-product of people pursuing their self-interest. 

In almost every chapter, Heyne dissects religious leaders’ pronouncements on economic issues (e.g., pp. 98-99). In one example, Heyne turns the tables on the critics of the market in his discussion of the ethics of property sales, in this case considering several Manhattan churches that sold their property over the objections of others who were offended by such transactions (pp. 39-41). One Manhattan resident who was a member of a community organization helped get “historic landmark” designations for some churches and effectively helped veto the congregations’ decisions to sell. Heyne argues that the actions of one Seventh-Day Adventist congregation, which sold its property for $2.4 million, were

far less greedy than the behavior of the woman who wanted to preserve a church building because it contributed to the attractiveness of the neighborhood in which she lives. The critic, not the church members, is the one who seems to be setting her own personal welfare ahead of the welfare of others, by claiming new rights for herself even though this violates the well-established rights of many others (p. 41).

Critics of mainstream economics will find much in the book with which to agree. His criticisms of mainstream economics are trenchant; of particular interest is Heyne’s discussion of the implicit assumptions about private property rights that underlie the exchange process. There is nothing in the fundamental core of economic theory and nothing in the core of the market economy as an exchange process that receives criticism from Heyne here. If anything, Heyne criticizes economists for not taking economics seriously enough.

According to Heyne, enthusiasm for the state stems from the unconstrained vision held by capitalism’s critics. One simply cannot implement his or her articulated view of the Great Society by slowly evolving voluntary means.  Greatness requires force; hence the attraction of reformers to increases in state power. Heyne states this eloquently on p. 190:

Voluntary actions move the world slowly and, from the global perspective, imperceptibly.  Those who want to be sure of changing the course of history must gain command of governments and armies?  What are the concrete achievements of even Mother Teresa when laid alongside the differences made to the world by Stalin, Hitler, Mao, or almost any ruler of the most minor state in the United Nations? The contemporary turn to government for the solution of all problems is not some kind of neurosis; it reflects an accurate judgment about where social power is concentrated today.

Heyne is especially clear in his criticisms of claims to particular rights, many of which are merely claims to special privileges. He notes that under conditions of trade, “everyone wins, or at least everyone with the right to be consulted” (p. 3). Here he ventures into the sticky nexus between economics and ethics and argues that economics assumes, even implicitly, that we do not have a right to exercise veto power over others’ voluntary trades. Claims of “exploitation” and of violation of workers’ rights around the world are also suspect. Heyne lays bare unpleasant anti-economic claims about trade: “What the critic is really saying is that sometimes people’s opportunities are so poor that we should not — not what?  That’s the question: not what? Not offer them somewhat better opportunities?” (p. 4).

There is much of value for specialists in economic education, as well. The editors also compile several chapters and essays on the University, the mission of a liberal education, and the importance of economic communication. He argues that there are several reasons to want students to understand economics (p. 316-17). The first is political: understanding economics helps people make better political decisions. This receives empirical support in Bryan Caplan’s 2007 book The Myth of the Rational Voter. The second reason is social and intellectual: “People with any sort of intellectual life, or just with a healthy human curiosity about the world in which they live, cannot be comfortable participating in a social system that they don’t understand.”

Editors Brennan and Waterman have done an admirable job assembling a wide-ranging collection of essays on issues of multi-disciplinary importance.  As it is a collection of essays, it does not lend itself particularly well to cover-to-cover reading; that said, however, I found it almost impossible to put down. The Great Conversation lost a very important participant when Paul Heyned died. Nonetheless, the editors of this book have ensured that his contributions will live on. Anyone can read it with profit, and it should find a space on the shelves of economists, ethicists, theologians, and religious leaders alike. 

References

Caplan, Bryan.  2007. The Myth of the Rational Voter: Why Democracies Choose Bad Policies.  Princeton: Princeton University Press.

Hedges, Chris.  2003. War is a Force that Gives Us Meaning.  New York: Anchor.

Klein, Daniel.  2005. The People’s Romance: Why People Love Government (As Much as They Do).  Independent Review 10(1):5-37.

Sowell, Thomas.  2007. A Conflict of Visions: Ideological Origins of Political Struggles.  New York: Basic Books.

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