Conference announcement: Markets and Society (October 21-24, 2022)

Markets and societyBy Mark D. White

The F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics (Mercatus Center, George Mason University) has announced an intriguing conference for next October. From the announcement:

The Markets & Society Conference aims to bring together scholars, students, and practitioners from various disciplines, ideological perspectives, and backgrounds who seek to advance inquiry, contestation, and research of consequence that are grounded in mainline political economy. This tradition posits that through emergent orders, formal and informal institutions, and the ability to learn from errors, humans can and often do find ways to live better together. Research in this tradition examines governance, resilience, and cooperation as well as the burdens, biases, and injustices that result from human interaction and institutions. Multiple disciplines, methods, and strategies are needed to examine the complexities of social life, ranging from analyzing the economic, political, and social consequences of institutions; understanding and reexamining history; assessing policies that attempt to stymie or encourage particular outcomes; and examining issues of morality and justice.

See the announcement for more details—the deadline for abstracts is March 1, 2022.


Ricardo Crespo on teaching the philosophy behind economics to economists (at Journal of Philosophical Economics)

J of phil econBy Mark D. White

In the latest issue of the Journal of Philosophical Economics (14/1-2, Spring-Autumn 2021), Ricardo Crespo (IAE) shares his reflections on "Teaching the Philosophical Grounding of Economics to Economists: A 10 Years' Experience." He describes his rationale below:

Looking at the possibilities of the new currents mentioned above – behavioural economics, neuroeconomics, evolutionary economics, happiness economics, civil economy, and the capability approach – proves highly attractive for students. This is an effective way to introduce philosophy because it is easy to understand that these plural economic approaches are supported by philosophical underpinnings, different epistemological perspectives, and views on human nature and the social world. However, a deep analysis of these new fields (which I undertook in my 2017 book) reveals that not all of them ‘escape’ from the narrow outlook that characterizes current economics. As John Davis points out (2008, p. 365),

economics, as other sciences, has regularly imported other science contents in the past, and having subsequently “domesticated” them, remade itself still as economics. In the current situation, for example, behavioral economics – a research program in economics, not in psychology – employs imports from psychology but frames them in terms of economic concerns.

Exploring the attitudes of economics towards these new possibilities – open or ‘colonialist’ – helps to differentiate them and to discover their philosophical roots. Thus, this analysis shows the influence of underlying philosophical notions on economic theories. (pp. 219-220)


CFP: The Measurement of Discrimination and Inequality (at Erasmus Journal for Philosophy and Economics)

Erasmus journalBy Mark D. White

The Erasmus Journal for Philosophy and Economics has posted a call for papers for an upcoming special issue on the measurement of discrimination and inequality:

The Erasmus Journal for Philosophy and Economics invites submissions for a forthcoming special issue devoted to the philosophy and economics of measuring discrimination and inequality

We are especially interested in contributions (4,000–8,000 words) that take an interdisciplinary approach at the intersection of philosophy and economics, and we welcome texts by authors from across the disciplinary spectrum.

We invite submissions from the following broad categories of possible (but non-exhaustive) questions:

    • Methodology of economics: What are the (normative and descriptive) assumptions underlying approaches to measuring and measures of discrimination and inequality? What explains the different methodological choices (for measuring discrimination/inequality) by researchers in various fields?
    • Ethics and political philosophy: What kind of inequality and discrimination is morally, or politically, relevant? How should researchers adjudicate among different definitions of discrimination and inequality?
    • Public policy: What are the consequences, broadly construed, of the measurement of discrimination and inequality for policy-making?
    • History of economic thought: What is the history behind approaches to measuring and measures of discrimination and inequality?

Length:

Texts should be of standard article length, between 4,000 and 8,000 words.

Deadline:

Texts should be submitted by December 31, 2021 (new extended deadline).

Procedure:

Submissions will go through our standard peer-review process. Please make a submission through the journal’s standard submission system. The special issue is scheduled for publication in the spring of 2022.

Questions:

If you have questions, contact the editors at editors@ejpe.org.


Elizabeth Pollman on the Supreme Court and the complexity of business interests (at Harvard Law Review)

Hlr pollmanBy Mark D. White

In her article "The Supreme Court and the Pro-Business Paradox" in the Harvard Law Review, Elizabeth Pollman (Penn Law) reconsiders the Roberts Court's reputation as pro-business in light of the heterogeneity of interests across firms, as well as the conflicting interests of different parties within firms, both often neglected in both economic and legal commentary and analysis. (For earlier work on this general topic, see Jonathan H. Adler's edited volume Business and the Roberts Court.)

From her introduction:

This Comment makes two primary contributions. It first observes that cases from the recent Term reflect an important way in which the Roberts Court has earned its reputation: over the beginning of the twenty-first century, the Court has often expanded corporate rights while narrowing corporate liability or access to justice against corporate defendants. Part I of this Comment sets forth this argument, using Americans for Prosperity, Ford, and Nestlé as case studies to show how the Court uses ill-fitting conceptions or overbroad generalizations to empower corporations and limit their accountability.

This trend gives rise to a paradox that Part II subsequently explores: the “pro-business” Court is often at odds with internal activity in corporate law and governance. Quite remarkably, as the Roberts Court has expanded corporate rights and narrowed pathways to liability, many shareholders and stakeholders have become vocal participants, putting pressure on corporations to rein in the use of their rights, to mitigate risks generated by their externalities, and to take account of environmental, social, and governance (ESG) concerns. The Court’s expansion of corporate rights not only disserves many corporate participants and spurs them to action but also might fuel challenges to new disclosure rules about corporate political activity or other ESG-related concerns that investors and others seek for effective participation in corporate governance. Further, as the Court has downplayed or ignored corporate decisionmaking structures in its jurisprudence expanding rights and narrowing liability, by contrast, in the world of corporate law and governance, we see that board oversight, monitoring, and compliance functions have grown in importance. State corporate law cases have heightened attention on the board’s role in providing oversight to ensure legal compliance throughout the corporation’s operations and to mitigate litigation and reputational risks that can arise from corporate abuses around the world. Corporate compliance programs and voluntary ESG initiatives have proliferated amid widespread debate about the purpose of the corporation and a broadened role for stakeholders.

Looking at these diverging developments together suggests that, at least in some important circumstances, the Supreme Court’s approach may not capture the reality of modern business corporations, and it might not be what many shareholders and corporate participants actually want. It may instead create new tensions in corporations that are not fully and easily resolved through private ordering and that undermine the conceptual foundation for the existing arrangements in corporate law and governance. It may also ultimately serve only a limited set of business interests — not the great number of workers who are often framed as stakeholders on the other side of “pro-business” jurisprudence, nor the majority of public corporation shareholders, who are increasingly diversified through institutions that rely on external regulation to constrain corporations and minimize systematic risk. And so, in sum, corporations might bear little resemblance to the Court’s characterizations, and the business world, on the whole, might often be better off without “pro-business” jurisprudence that empowers corporations and erodes their external constraints.


Elsa Kugelberg on norms, choice, and responsibility (in Politics, Philosophy & Economics)

Ppe coverBy Mark D. White

Forthcoming in Politics, Philosophy & Economics is a fascinating article by Elsa Kugelberg (Oxford) titled "Responsibility for Reality: Social Norms and the Value of Constrained Choice," in which she investigates the impact of social norms on the responsibility we bear for our choices, using the example of the interaction of gender norms and HIV prevention measures. From the abstract:

How do social norms influence our choices? And does the presence of biased norms affect what we owe to each other? Looking at empirical research relating to PrEP rollout in HIV prevention policy, a case in which harmful gender norms have been found to impair the choices of young women, I argue that the extent to which we can be held responsible for our choices is connected to the social norms that apply to us. By refining T. M. Scanlon’s Value of Choice view, I introduce a norms-sensitive contractualist theory of substantive responsibility. This feminist ‘Value of Constrained Choice view’ presents those who choose under harmful norms as having generic reasons to reject principles that provide them with opportunities they are effectively constrained from choosing. I argue that to fulfil their duties to us, and our duties to each other, policymakers must study the influence of social norms on choice and accommodate it in public policy. Contractualists have reason to pay special attention to social norms, as their unequal effects on choice reveal that we are not living under terms that no one could reasonably reject.


Bossert, Cato, and Kamaga on sufficientarianism (open-access at Journal of Political Philosophy)

J pol philBy Mark D. White

Forthcoming (and open-access) in the Journal of Political Philosophy from Walter Bossert (University of Montreal), Susumu Cato (University of Tokyo), and Kohei Kamaga (Sophia University), "Critical-Level Sufficientarianism" supplements the utilitarian basis of normative policy-oriented economics with the requirement that no one ends up with too little:

In this article, we employ an axiological approach to identify a class of sufficientarian principles. Our starting point is the notion of absolute priority, a requirement that we consider to be at the very core of sufficientarian ideas. Absolute priority postulates that attention is to be focused on those whose well-being is below the threshold, and the utilities of those above the threshold only matter as a tie-breaker if the criterion to be applied below the threshold fails to be decisive. The feature that is novel to our approach is that we combine this fundamental sufficientarian principle with axioms that have a distinctly utilitarian flavor. This allows us to develop a sufficientarian theory that is based on utilitarian principles. Our most important observation is that our theory, which we refer to as critical-level sufficientarianism, necessarily follows as a consequence of adding the absolute-priority requirement to utilitarian axioms.


Bailey, Rettler, and Warmke on the ethics of cryptocurrency (at Philosophy Compass)

CryptocurrenciesBy Mark D. White

A two-part article forthcoming at Philosophy Compass by Andrew M. Bailey, Bradley Rettler, and Craig Warmke discusses ethical questions surrounding cryptocurrency:

"Philosophy, Politics, and Economics of Cryptocurrency I: Money without State"

In this article, we describe what cryptocurrency is, how it works, and how it relates to familiar conceptions of and questions about money. We then show how normative questions about monetary policy find new expression in Bitcoin and other cryptocurrencies. These questions can play a role in addressing not just what money is, but what it should be. A guiding theme in our discussion is that progress here requires a mixed approach that integrates philosophical tools with the purely technical results of disciplines like computer science and economics.

"Philosophy, Politics, and Economics of Cryptocurrency II: The Moral Landscape of Monetary Design"

In this article, we identify three key design dimensions along which cryptocurrencies differ – privacy, censorship-resistance, and consensus procedure. Each raises important normative issues. Our discussion uncovers new ways to approach the question of whether Bitcoin or other cryptocurrencies should be used as money, and new avenues for developing a positive answer to that question. A guiding theme is that progress here requires a mixed approach that integrates philosophical tools with the purely technical results of disciplines like computer science and economics.


Elizabeth Brake on price gouging (in Economics and Philosophy)

Economics and philosophyBy Mark D. White

In the latest issue of Economics and Philosophy (37/3, November 2021), Elizabeth Brake (Rice University) examines one of the most controversial topics in the ethical analysis of market behavior. In her article "Price Gouging and the Duty of Easy Rescue," Brake surveys the standard economic and ethical arguments for and against the practice, and suggests a novel ethical argument against it: that it violates our obligation to help people in emergency situations when it is of little cost to us. This position is usually associated with utilitarianism, thanks to Peter Singer, but can also be derived from various forms of deontology (although the positive nature of the duty may demand an extra step) as well as virtue ethics.

Brake makes a legal case as well as an ethical one, arguing that there is a basis in law for enforcement of a duty of easy rescue in such cases where price gouging arises. As she acknowledges, this is a more difficult case to make, because a legal duty normally implies a right that is violated, and a legal right to assistance is not generally recognized, however dire one's circumstances. She suggests several alternative ways of justifying a limited prohibition of price gouging based on legal duty of easy rescue, such as considering it as part of the regulation of market activity in the public interest, in which businesses are prohibited from harmful practices.

There is much more in Brake's paper than I can discuss here and it rewards a careful reading. For instance, she does address the economic benefits of price gouging, such as increasing supply of much-needed goods to disaster-stricken areas, and her ethical and legal analysis does allow for price increases to cover legitimate costs and risk. Her argument is against "pure" profiteering only, claiming that the seller's interest in higher profit does not justify holding disaster victim's interest in survival hostage to negotiations over price. Related to this, Brake also notes that market conditions are far from ideal in disasters, so we should not assume the same quality of consent, or use the same standards of coercion or duress, when evaluating transactions offered or made in such a context.

(For more of Brake's work on disaster ethics, see the dedicated page at her website.)


Concluding the "Cost-Benefit Analysis at the Crossroads" symposium (LPE Project)

Lpe projectBy Mark D. White

The final two posts at the "Cost-Benefit Analysis at the Crossroads" symposium at the LPE Project are more practical, focusing on the impact of CBA techniques in health care and the environment. (Kudos to the LPE Project for this fascinating and provocative collection of essays.)

In "The 'Value of a Statistical Life': Reflections from the Pandemic," Mark Silverman (Franklin & Marshall College) questions the validity of the concept of willingness-to-pay (WTP) on which most CBA calculations are based, especially insofar as they are taken to reflect risk-reward trade-offs, which are at the center of policymaking during the pandemic. He identifies two specific problems in particular:

The first is specific to the notion of worker rates of substitution between income and risk. In the pandemic-induced recession of 2020, with a restricted range of job opportunities, and little publicly provided material support, newly-acknowledged “essential” workers had little choice to but to accept increasingly risky jobs with little or no hazard pay. In fact, the worse the bargaining position for workers, the less they will “value” their lives – lest they risk their livelihood.

The second criticism focuses on the endogeneity of the underlying preferences. Even assuming away the question of worker bargaining power, we are still left with the question of whether, as a matter of policy, our social willingness to pay for mortality risk should be defined exclusively in terms of agents’ WTP as revealed by the market.

In "The Shaky Legal and Policy Foundations of Cost-Benefit Orthodoxy in Environmental Law," Amy Sinden (Temple University) surveys the numerous difficulties with using CBA to screen environmental policies, given the difficulty of quantifying (or monetizing) environmental improvements. Sinden lays out the implications of this failure:

If important benefits are left out of the equation the vast majority of the time, then CBA operates at best as an informal screening tool, telling us, if we’re lucky, whether the benefits of a regulation in a rough sense exceed the costs. (When you’re not so lucky and your partial benefits estimate comes out lower than your cost estimate, it doesn’t tell you much of anything.) 

Once demoted from a formal optimization tool to a rough screening tool, CBA loses its normative pedigree in welfare economics and joins the ranks of the other perhaps less theoretically beguiling but highly pragmatic cost screening tools that Congress has so often relied on in crafting our environmental statutes. These are the scrappy, street-smart tools of regulatory decision-making, like feasibility analysis, cost-effectiveness analysis, and multi-factor balancing—tools that arguably make up for in pure pragmatic effectiveness what they lack in theoretical elegance. Once your goal is no longer to reach the mythical state of economic efficiency, but rather to ensure that costs are not in some general sense unreasonable, these other tools may actually get you there more quickly, easily, and—dare I say—efficiently

She concludes that, rather than doubling down on CBA, the federal government should defer to individual agencies, who

should decide how to most appropriately account for costs and benefits by choosing among the wide array of tools available. This choice should be tailored to the particular context in which the rulemaking arises, giving particular attention to the feasibility of quantifying and monetizing relevant costs and benefits, along with the agency’s statutory mandates.


Nebel on Harsanyi's aggregation theorem

HarsanyiBy Mark D. White

Forthcoming in Philosophy and Phenomenological Research, "Aggregation without Interpersonal Comparisons of Well-Being" by Jacob M. Nebel (University of Southern California) weighs in on a timeless debate in social choice theory:

This paper is about the role of interpersonal comparisons in Harsanyi’s aggregation theorem. Harsanyi interpreted his theorem to show that a broadly utilitarian theory of distribution must be true even if there are no interpersonal comparisons of well-being. How is this possible? The orthodox view is that it is not. Some argue that the interpersonal comparability of well-being is hidden in Harsanyi’s premises. Others argue that it is a surprising conclusion of Harsanyi’s theorem, which is not presupposed by any one of the premises. I argue instead that Harsanyi was right: his theorem and its weighted-utilitarian conclusion do not require interpersonal comparisons of well-being. The key to making sense of this possibility is to treat Harsanyi’s weights as dimensional constants rather than dimensionless numbers.

Aside from Nebel's own novel contribution, this paper offers a fine overview of Harsanyi's arguments and subsequent commentary on them. (Earlier this year, Nebel also published "Utils and Shmutils," a review of Matthew Adler's Measuring Social Welfare: An Introduction, in Ethics.)