Hausman and McPherson provide an evidential defense of welfare economics, arguing that preferences are not constitutive of welfare but nevertheless provide the best evidence for what promotes welfare. Behavioral economics identifies several ways in which some people's preferences exhibit anomalies that are incoherent or inconsistent with rational choice theory. I argue that the existence of these behavioral anomalies calls into question the evidential defense of welfare economics. The evidential defense does not justify preference purification, or eliminating behavioral anomalies before conducting (...) welfare analysis. But without doing so, the evidential defense yields implausible welfare implications. I discuss how the evidential defense could be modified to accommodate behavioral anomalies. (shrink)

The social sciences, and particularly economics, play an important role in business. This article reviews the account of the interdisciplinary conversation between Catholic Social Teaching and the social sciences (especially economics) over the last century, and describes Benedict XVI’s development of this account in Caritas in Veritate . Over time the popes recognized that the technical approach of economics was a barrier to fruitful collaboration between economics and Catholic Social Teaching, both because the economic approach is reductionist, and because modern (...) social science is skeptical of comprehensive accounts of human nature. Through an appeal to charity in truth, one can deduce from Caritas in Veritate that economists, along with business and management theorists, need to take seriously the project of reflecting on and promoting true human goods in society. To love the person one must reflect on what is truly good for the person; to discover the true good of the person, one must love the person. (shrink)

Basing their claims on findings in the behavioral sciences that illuminate cognitive deficiencies, scholars spanning multiple disciplines argue that certain features of free market capitalist societies threaten human wellbeing, especially insofar as such societies are marked by a proliferation of consumer choices and incessant demands on decision making. This paper thus attempts three things. First, it outlines the criticisms of the expansive freedoms found in free market societies, based on those findings, in order to provide a reliable overview of the (...) shape of the critics’ concerns. Second, it surveys typical objections to these critics’ concerns, while also taking note of actual and anticipated counter-responses, in order to demonstrate why the debate about the value of those freedoms is not settled by those objections. Third, it argues that one objection remains that demands further debate and consideration before the critics’ choice restrictions should materialize. Namely, since there is solid evidence that entrepreneurship contributes to overall happy and healthy societies, and since the benefits of entrepreneurship are best realized in the types of societies marked by more expansive freedoms than the critics would countenance, the critics, who are concerned with general wellbeing, ought to consider the impact of their choice-restricting proposals on entrepreneurship. This paper does not claim that these critics offer baseless concerns about various threats to our wellbeing that arise from ample exercises of liberty, but it does argue that recognizing the role that entrepreneurship plays in fostering such wellbeing severely dampens the force of their implications for liberty. (shrink)

A growing number of decision theorists have, in recent years, defended the view that rationality is permissive under risk: Different rational agents may be more or less risk-averse or risk-inclined. This can result in them making different choices under risk even if they value outcomes in exactly the same way. One pressing question that arises once we grant such permissiveness is what attitude to risk we should implement when choosing on behalf of other people. Are we permitted to implement any (...) of the rationally permissible risk attitudes, is there some specific risk attitude that is required when choosing for others, or are we required to defer to the risk attitudes of the people on whose behalf we are choosing? This article elaborates on this question, explains its wider practical and theoretical significance, provides an overview of existing answers, and explores how to go about providing a more systematic account of how to choose on behalf of others in risky contexts. (shrink)

Hausman and McPherson defend welfare economics by claiming that even if welfare does not consist in preference satisfaction, preferences still provide good, if fallible, evidence of welfare. I argue that this strategy does not yet fully solve the problems for welfare economics stemming from the preference satisfaction theory of welfare. More work is needed to show that our self-interested preferences are sufficiently reliable, or in some other sense our best, evidence of well-being. Thus, my aim is to identify the challenges (...) that remain and clarify what additional work is needed before Hausman and McPherson's defence of welfare economics succeeds. (shrink)

This paper presents arguments that challenge what I call the fact/value separability thesis: the idea, roughly, that factual judgements can be made independently of judgements of value. I will look at arguments to the effect that facts and values are entangled in the following areas of the scientific process in economics: theory development, economic concept formation, economic modelling, hypothesis testing, and hypothesis acceptance.

Systems of urban transportation are largely shaped through planning practices. In transport economics, the benefits of infrastructure investments consist mainly of travel time savings calculated using monetary values of time. The economic interpretation of the value of travel time has significantly shaped our urban environment and transportation schemes. However, there is often an underlying assumption of transferability between time and money, which arguably does not sufficiently take into account the specific features of time. In this paper, we analyze the various (...) properties of time as an economic resource using findings in behavioral economics and psychology. Due to limitations in the standard model, it is proposed that an alternative model value should be investigated in which time rather than money is the primary carrier of and the basic features of such a model are outlined. An improved understanding the nature of time as a source of utility puts us in a better position to determine what aspects of time matter. Additionally, the analysis can be applied to further develop modeling where value of time plays a significant role; such as new models for the planning of urban transport. (shrink)

A lively topic of debate in decision theory over recent years concerns our understanding of the different risk attitudes exhibited by decision makers. There is ample evidence that risk-averse and risk-seeking behaviours are widespread, and a growing consensus that such behaviour is rationally permissible. In the context of clinical medicine, this matter is complicated by the fact that healthcare professionals must often make choices for the benefit of their patients, but the norms of rational choice are conventionally grounded in a (...) decision maker’s own desires, beliefs and actions. The presence of both doctor and patient raises the question of whose risk attitude matters for the choice at hand and what to do when these diverge. Must doctors make risky choices when treating risk-seeking patients? Ought they to be risk averse in general when choosing on behalf of others? In this paper, I will argue that healthcare professionals ought to adopt a deferential approach, whereby it is the risk attitude of the patient that matters in medical decision making. I will show how familiar arguments for widely held anti-paternalistic views about medicine can be straightforwardly extended to include not only patients’ evaluations of possible health states, but also their attitudes to risk. However, I will also show that this deferential view needs further refinement: patients’ higher-order attitudes towards their risk attitudes must be considered in order to avoid some counterexamples and to accommodate different views about what sort of attitudes risk attitudes actually are. (shrink)

In my feature article in this issue, ‘Doctors, patients and risk attitudes’, I argue that considerations of both autonomy and beneficence support the practice of healthcare professionals deferring to their patients’ reflectively endorsed risk attitudes when making decisions under uncertainty.1 The commentaries written in response to this article present many interesting criticisms, limitations and applications of the view, and I am grateful to all of the commentators for their engagement with this topic. I cannot possibly do justice to all of (...) the points they have raised in this brief response, so I will address two common themes that appear in a number of the commentaries: first, whether the view I have proposed goes too far or not far enough in deferring to individual patients; and second, the epistemic challenge that would be faced when trying to put this approach into practice. Theoretical accounts of the link between preferences and either well-being or autonomy face a familiar tension: if well-being or autonomy are tied too closely to individuals’ actual preferences, one must contend with examples of preferences that seem obviously bad for a person or disconnected from their status as …. (shrink)

The value of health states is often understood to depend on their impact on the goodness of people's lives. As such, prominent health states metrics are grounded in particular conceptions of wellbeing – e.g. hedonism or preference satisfaction. In this paper, I consider how liberals committed to the public justification requirement – the requirement that public officials choose laws and policies that are justifiable to their citizens – should evaluate health states. Since the public justification requirement prohibits public officials from (...) appealing to controversial conceptions of the good life, liberals committed to this principle face a significant puzzle. (shrink)

Der libertäre Paternalismus genießt in Politik, Wissenschaft und Öffentlichkeit eine große Popularität, die er insbesondere zwei Merkmalen verdankt: Erstens stützt sich der LP auf verhaltensökonomische Ergebnisse, die zeigen, dass individuelle Entscheidungen oft nicht der neoklassischen Rationalitätskonzeption entsprechen, sodass Individuen durch sogenanntes Nudging zu besseren, ihren wahren Präferenzen entsprechenden Entscheidungen verholfen werden könne. Zweites ist damit der Anspruch verbunden, das Wohlergehen der Individuen, wie sie selbst es verstehen, zu erhöhen. Dieser Beitrag zeigt anhand einer dogmengeschichtlichen Analyse der zentralen, dem LP zugrunde (...) liegenden Begriffe Präferenz, Nutzen, Rationalität und Wohlergehen, dass der LP diesen Anspruch nicht einlösen kann. Eine detaillierte begriffliche Analyse ist deshalb geboten, weil diese Konzepte in der Ökonomik immer wieder für Missverständnisse sorgen. Eine theoriegeschichtlich informierte Untersuchung wiederum ist notwendig, da diese Konfusion insbesondere auf der Tatsache beruht, dass der Gehalt dieser Begriffe sich im Laufe der Zeit gravierend verändert hat und sich die verschiedenen Bedeutungen heute z. T. wechselseitig überlagern. (shrink)

Acceding to the demand that public policy should be based on “the best available evidence” can come at significant moral cost. Important policy questions cannot be addressed using “the best available evidence” as defined by the evidence-based policy paradigm; the paradigm can change the meaning of questions so that they can be addressed using the preferred kind of evidence; and important evidence that does not meet the standard defined by the paradigm can get ignored. We illustrate these problems in three (...) contexts of evidence-based policy. (shrink)

New technologies not only contribute greatly to society and the economy; they also involve fundamental societal shifts, challenging our values and ideas about ourselves and the world. With a view to aligning technological change and innovation with ethical values, the concept of responsible innovation advocates the inclusion of a variety of stakeholders, in particular from society. In shifting moral responsibility towards the producers of innovations, responsible innovation rejects the standard normative economic view that the ethical evaluation of innovations is a (...) matter of individual consumers’ market-based choices. However, in this article we argue that responsible innovation should not abandon all normative consideration of the individual outright, to which end we present an alternative normative economic approach based on preference learning. We show how this approach can provide an enhanced understanding of responsible innovation by clarifying the redistribution of moral responsibility and casting individuals in the normative role of co-innovators, rather than mere consumers. We argue that responsible innovation should enable individuals to form preferences and evaluate innovations, so as to align innovation with ethical demands. Finally, we show how our proposed approach can be put into practice in so-called laboratories in real-world contexts, using methods from the field of design. In short, drawing on normative economics, this article aims to establish a new understanding of responsible innovation that is conceptually sound and can form the basis for novel innovation practices. (shrink)

Policy-makers sometimes aim to improve well-being as a policy goal, but to do this they need some way to measure well-being. Instead of relying on potentially problematic theories of well-being to justify their choice of well-being measure, Daniel Hausman proposes that policy-makers can sometimes rely on preference-based measures as evidence for well-being. I claim that Hausman’s evidential account does not justify the use of any one measure more than it justifies the use of any other measure. This leaves us at (...) a loss as to which policy should be chosen in the non-trivial cases for which there is substantial disagreement between the different measures in their assessment of policy. (shrink)

This essay criticizes the proposal recently defended by a number of prominent economists that welfare economics be redirected away from the satisfaction of people's preferences and toward making people happy instead. Although information about happiness may sometimes be of use, the notion of happiness is sufficiently ambiguous and the objections to identifying welfare with happiness are sufficiently serious that welfare economists are better off using preference satisfaction as a measure of welfare. The essay also examines and criticizes the position associated (...) with Daniel Kahneman and a number of co-authors that takes welfare to be ‘objective happiness’ – that is, the sum of momentary pleasures. (shrink)

The health gradient among those who are by historical standards both remarkably healthy and well-off is of considerable moral importance with respect to benevolence, justice and the theory of welfare. Indeed it may help us to realize that for most people the good life lies in close and intricate social ties with others which can flourish only when inequalities are limited. The health gradient suggests that there is a story to be told in which egalitarian justice, solidarity, health and well-being (...) go hand-in-hand. (shrink)

In the recent well-being literature, various theory-free accounts of well-being have been proposed to ground informative evaluations of policies’ welfare implications without relying on any specifi...

In traditional decision theory, utility is regarded as a mathematical representation of preferences to be inferred from agents hedonic experiences. Some go as far as to contend that utility is literally computed by specific neural areas and urge economists to complement or substitute their notion of utility with some neuro-psychological construct. In this paper, I distinguish three notions of utility that are frequently mentioned in debates about decision theory and examine some critical issues regarding their definition and measurability. Moreover, I (...) provide various empirical and conceptual reasons to doubt that economists should base decision theoretic analyses on some neuro-psychological notion of utility. (shrink)

Normative welfare economics commonly assumes that individuals’ preferences can be reliably inferred from their choices and relies on preference satisfaction as the normative standard for welfare. In recent years, several authors have criticized welfare economists’ reliance on preference satisfaction as the normative standard for welfare and have advocated grounding normative welfare economics on opportunities rather than preferences. In this paper, I argue that although preference-based approaches to normative welfare economics face significant conceptual and practical challenges, opportunity-based approaches fail to provide (...) a more reliable and informative foundation for normative welfare economics than preference-based approaches. I then identify and rebut various influential calls to ground normative welfare economics on opportunities rather than preferences to support my qualified defence of preference-based approaches. (shrink)

In recent years, several authors have called to ground descriptive and normative decision theory on neuro-psychological measures of utility. In this paper, I combine insights from the best available neuro-psychological findings, leading philosophical conceptions of welfare and contemporary decision theory to rebut these prominent calls. I argue for two claims of general interest to philosophers, choice modellers and policy makers. First, severe conceptual, epistemic and evidential problems plague ongoing attempts to develop accurate and reliable neuro-psychological measures of utility. And second, (...) even if these problems are solved, neuro-psychological measures of utility lack the potential to inform welfare analyses and policy evaluations. (shrink)

This paper provides a philosophical assessment of leading theory-based, evidence-based and coherentist approaches to the definition and the measurement of well-being. It then builds on this assessment to articulate a reformed division of labor for the science of well-being and argues that this reformed division of labor can improve on the proffered approaches by combining the most plausible tenets of theory-based approaches with the most plausible tenets of coherentist approaches. This result does not per se exclude the possibility that theory-based (...) and coherentist approaches may be independently improved or amended in the years to come. Still, together with the challenges that affect these approaches, it strengthens the case for combining the most plausible tenets of those approaches. (shrink)

Recently several authors have proposed proxies of welfare that equate some (as opposed to all) choices with welfare. In this paper, I first distinguish between two prominent proxies: one based oncontext-independent choicesand the other based onreason-based choices. I then propose an original proxy based on choices that individuals state they would want themselves to repeat at the time of the welfare/policy evaluation (confirmed choices). I articulate three complementary arguments that, I claim, support confirmed choices as a more reliable proxy of (...) welfare than context-independent and reason-based choices. Finally, I discuss the implications of these arguments fornudgesandboosts. (shrink)

This paper argues that, in light of the apparent settled nature of economists’ judgement on the issue of trade liberalization, the profession has stopped thinking critically about the question and, as a consequence, makes poor-quality arguments justifying their consensus. To develop support for this claim, the paper first recounts what economic analysis can say about trade liberalization. Then it analyses the quality of the arguments that economists make in support of free trade. The paper argues that the standard argument made (...) by economists in favour of free trade is either incoherent or implicitly imposes philosophical value judgements about what is good for a nation or society, or it makes leaps of empirical faith about how the world works. The paper concludes with suggestions for better arguments. View HTML Send article to KindleTo send this article to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle. Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply. Find out more about the Kindle Personal Document Service.DECONSTRUCTING THE ARGUMENT FOR FREE TRADE: A CASE STUDY OF THE ROLE OF ECONOMISTS IN POLICY DEBATESVolume 28, Issue 1Robert Driskill DOI: https://doi.org/10.1017/S0266267112000090Your Kindle email address Please provide your Kindle [email protected]@kindle.com Available formats PDF Please select a format to send. By using this service, you agree that you will only keep articles for personal use, and will not openly distribute them via Dropbox, Google Drive or other file sharing services. Please confirm that you accept the terms of use. Cancel Send ×Send article to Dropbox To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Dropbox. DECONSTRUCTING THE ARGUMENT FOR FREE TRADE: A CASE STUDY OF THE ROLE OF ECONOMISTS IN POLICY DEBATESVolume 28, Issue 1Robert Driskill DOI: https://doi.org/10.1017/S0266267112000090Available formats PDF Please select a format to send. By using this service, you agree that you will only keep articles for personal use, and will not openly distribute them via Dropbox, Google Drive or other file sharing services. Please confirm that you accept the terms of use. Cancel Send ×Send article to Google Drive To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive. DECONSTRUCTING THE ARGUMENT FOR FREE TRADE: A CASE STUDY OF THE ROLE OF ECONOMISTS IN POLICY DEBATESVolume 28, Issue 1Robert Driskill DOI: https://doi.org/10.1017/S0266267112000090Available formats PDF Please select a format to send. By using this service, you agree that you will only keep articles for personal use, and will not openly distribute them via Dropbox, Google Drive or other file sharing services. Please confirm that you accept the terms of use. Cancel Send ×Export citation Request permission. (shrink)

We present the Welleye – a novel and conceptually clear framework that shows how attention links the objective circumstances of people’s lives and selves to how they spend their time and feel day to day. While existing wellbeing frameworks in policy contain many of the factors included in the Welleye, they all lack attention as the “lens” that determines the impact of these factors on how people feel. Policymakers and organizations can use the Welleye to better understand how people are (...) faring and design and evaluate interventions aimed at making people better off. (shrink)

Scholars disagree about the plausibility of preference purification. Some see it as a familiar phenomenon. Others denounce it as conceptually incoherent, postulating that it relies on the psychologically implausible assumption of an inner rational agent. I argue that different notions of rationality can be leveraged to advance the debate: procedural rationality and structural rationality. I explicate how structural rationality, in contrast to procedural rationality, allows us to offer an account of the guiding idea behind preference purification that avoids inner rational (...) agents. Afterward, I address two pressing challenges against preference purification that emerge under the structural rationality account. (shrink)

Consumers and producers aim to maximize their welfare through economic transactions. Their welfare is determined by choices and preferences. Therefore, understanding social and economic welfare projected by conventional and Islamic economics requires exploring their underlying paradigms and axioms for preference formation, choices, and welfare maximization. Even though conventional economics assumes that preferences are given, it actually considers that they are driven by self-interest. It does not discuss preference formation along determining moral axioms. Rather, it starts from revealed preferences to understand (...) choices of consumers and producers. Thus, preference formation is like a black box. This paper is an attempt to unlock this black box by exploring preference formation along its underlying moral axioms for good life. The paper discusses Islamic moral ideals within the Islamic worldview along the implications of those axioms for consumers, employees, and employers. The paper also explores the gap between those ideals and Muslim reality. It suggests how to empirically test the relationship between moral axioms and ethical behaviors of consumers, employers, and employees. It concludes that internalizing moral axioms would serve as an ethical compass necessary to establish formal and informal institutions for efficient and ethical business organizations. (shrink)

The paper explores Islamic morality within labor market realities. It presents Islamic moral axioms that are expected to guide employer–employee relationships. It provides an extensive review of Islamic moral ideals related to fairness in the labor market. Based on survey data from 319 individuals in the Saudi labor market, it tests three hypotheses related to religiosity, secular aspirations, and perception and practice of fairness in the labor market. Using multinomial logistic regression, the findings from several models clearly support all three (...) hypotheses. They show that employers, owners and senior managers were more likely to consider market reality as their reference for describing fairness. Ideally speaking, the regression results confirm that being religious contributes positively to the sense of fairness even in a secular context. However, they also reveal that secular aspirations override religious ideals when it comes to market realities. In other words, when people place great importance on worldly outcomes, religious ideals have almost no impact on their labor market practices even if they ideally support fair practices. The study concludes that religious morality does matter with regard to fairness in employer–employee relationships only if it is not superseded by secular aspirations. Those who have a high-level of religiosity consider themselves to be fairer. However, if they embrace secular aspirations, they are less likely to practice their moral ideals in the labor market. (shrink)

This is a comprehensive anthology of works concerning the nature of economics as a science, including classic texts and essays exploring specific branches and schools of economics. Apart from the classics, most of the selections in the third edition are new, as are the introduction and bibliography. No other anthology spans the whole field and offers a comprehensive introduction to questions about economic methodology.

Several authors have recently advocated a so-called new case for paternalism, according to which empirical findings from distinct decision sciences provide compelling reasons in favour of paternalistic interference. In their view, the available behavioural and neuro-psychological findings enable paternalists to address traditional anti-paternalistic objections and reliably enhance the well-being of their target agents. In this paper, I combine insights from decision-making research, moral philosophy and evidence-based policy evaluation to assess the merits of this case. In particular, I articulate and defend (...) three complementary arguments that, I claim, challenge even the best available calls for such case. In doing so, I identify the main justificatory challenges faced by the new paternalists and explicate the implications of these challenges for the ongoing philosophical debate about the justifiability of paternalistic interference. (shrink)