For a number of economic systems (e.g., libertarianism, free market economics, neo-liberalism, social democracy, democratic socialism, communism etc), in intelligent debate many people justify their preferred system as public policy by appealing to some ethical theory, to convince other people of the morality or superiority of their system.
The Austrians who follow the praxeological system of von Mises claim that economic science is value-free, and that the inferences of praxeology are justifiable as economic laws independently of ethics, though that remains a questionable idea. But, as a public policy prescription, even Austrians will often require an ethical theory, and Rothbard explicitly used natural rights theory to justify his anarcho-capitalism.
In the end, when an economic system is urged as a policy it must often be justified or limited by an ethical/moral theory, and one needs an objective theory of right or wrong to do this. For the only effective theories available to justify a larger philosophical system in a consistent way are objectivist theories of ethics (that is to say, a subjectivist or relativist theory of ethics is self-defeating).
In essence, an objectivist theory of ethics holds that:
– moral judgements are propositions that have an objective value, either true or false (e.g, “The unjustified killing of another human being is wrong”);If we want an objectivist theory of our morality, we essentially have these options:
– the truth of a moral proposition remains true regardless of the subjective opinions of a person or the values of a different culture (e.g., “Slavery is wrong”);
– morality is not subjective or relative.
All of these objectivist theories of morality/ethics can be divided into two basic groups as follows:
- (1) Moral absolutism
- (a) Divine Command Theory
- (b) Categorical Imperative ethics (Kantian ethics)
- (2) Moral Universalism (minimal/moderate moral realism)
- (i) Deontological theories:
- (a) Natural law theories (Plato and many Christian philosophers)
- (b) Thomist ethics
- (c) Pluralistic deontology, the non-absolutist ethics of W.D. Ross
- (d) Human rights objectivism (Rawls)
- (ii) Consequentialist theories:
- (e) Utilitarianism (act utilitarianism; rule utilitarianism)
- (f) Ayn Rand’s objectivism?
- (3) Ayn Rand’s objectivism?
- (4) Utilitarian Kantian Principle of James Cornman (this combines deontology and utilitarianism).
(1) Deontological theories (= duty or obligation based morality): the basis of morality is duty and some acts are always right no matter what consequences they can cause (the best example of which is Kantian ethics or some forms of divine command theory; Kant famously said that it is always wrong to lie, no matter what the circumstances).Use your intuition and find out whether you subscribe to (1) a duty-based ethical theory or (2) a utilitarian or consequentialist ethical theory by thinking about this moral problem:
(2) Consequentialist theories: the basis of morality is the evaluation of the consequences of acts on people (the most famous such theory is Utilitarianism). The greatest happiness of the greatest number of people is one way of describing it.
(I will not address the question whether Ayn Rand’s objectivism is consequentialist or in a category by itself, since this is disputed.)
A known murderer comes to you and asks to know where a person he wants to kill is, and you are aware of his desire to commit murder. Do you:Decision (1) makes you a utilitarian, and (2) a believer of duty-based ethics. Immanuel Kant held that (2) is the moral course of action, since lying is always immoral, under all circumstances.
(1) Lie to protect the innocent person and say you do not know, or
(2) Tell the murderer where that person is in the knowledge that a murder may occur?
Ethics as Applied to Economics
Divine command theory is easily refuted: e.g., if god orders someone to commit genocide, then this suddenly becomes a “moral” action, because God has ordered it. Thus divine ethics turns out to be a subjective theory of ethics: what is moral and what is not actually depends, in the end, on the arbitrary whim of God, not the goodness of actions or their consequences. If God’s moral laws are not arbitrary, then there must be some independent, objective standard or method he uses to determine what is right and wrong. But, if there is an independent, objective standard, then it is this system that tells us what is right or wrong, not the commands of God. We could presumably use reason to apply the standard ourselves to discover what is right and wrong, without any need for instruction from God. (And Kantian ethics was in fact partly an attempt to create an objectivist ethics that could defend Christian morality, but remove this problem by basing morality on moral principles derived from human reason.)
Many libertarians rely on a natural law/natural rights theory of ethics.
Thus they often argue that state intervention is bad when it violates private property rights, and that this government action is always immoral, irrespective of the good or bad consequences that state intervention has or may have.
Natural law as a theory can be traced back to Plato, the ancient Stoics, and many Christian philosophers. (Contrary to popular belief, the most widely-held theory of ethics in the Middle Ages in Christian philosophy was the natural law theory, not the crude divine command theory.)
Natural law was famously attacked by the English utilitarian philosopher Jeremy Bentham as “nonsense on stilts.”
One of the main weaknesses of natural law theory is that its main historical justification was the belief in a “divine order” and a divinely-created human nature that makes us conform to “natural law.”
For Plato, the divine soul made human beings conform to the natural law of the universe. In ancient Stoicism, all humans had a divine reason given by the gods to make them adhere to divine “natural law.”
When natural law theory was taken up by Christian theologians, they simply substituted the Christian god for the gods of the Greek and Romans.
In the early modern period, rationalist European philosophers like Grotius tried to defend natural law theory by removing God and the previous supernatural justification for it.
However, in doing so, they destroyed the only convincing explanation for belief in natural law (Tawney 1998: xxv-xxvi).
Thus anyone who accepts an atheistic and naturalistic scientific view of the universe, and who rejects all religion, has no reason to believe in natural law or natural rights.
I would note here that just because we appear to have an innate sense of right and wrong, this does not provide us with an objective system of ethics. That some scientists believe they can identify an innate sense of right and wrong, which humans have evolved through social life in communities during our evolutionary history, does not mean that they have found an objectivist theory of morality that can function as a consistent, logical and universal system for justifying our moral choices, both now and in the past. The well-known fact that there is a vast chasm between what can be regarded as moral in one society and immoral in another demonstrates that, like our language faculty (which also has a biological basis), our innate moral intuition can lead to quite different systems of morality in different cultures in different times (just as our core language faculty leads to vastly different languages, with different words, grammar and syntax). For instance, in ancient Greece and Rome, the killing of unwanted children by exposing them (i.e., leaving them at crossroads or abandoning them at birth) was widely accepted. Human sacrifice and slavery were also widely practised in many ancient societies, and this was apparently perfectly compatible with the “innate moral sense of right and wrong” that ancient people had, although it is no longer accepted today.
Only an objectivist theory of morality can demonstrate that these things are immoral now and also immoral in the past. So it turns out the innate sense of right and wrong is not the same thing as an objectivist theory of morality.
Nor does appealing to “nature” give us any objective standard of right and wrong. For example, cannibalism is observed in many species: does this make cannibalism moral for humans? It certainly does not, and anyone who thinks so has committed the fallacy of appeal to nature, a fallacy of relevance.
I will note here too that a very good starting point for why natural law and natural rights are untenable is Kai Nielsen, “The Myth of Natural Law,” in S. Hook (ed.), Law and Philosophy: A Symposium, University Press, New York. 1963.
Also relevant is L. A. Rollins, The Myth of Natural Rights (Loompanics Unlimited, 1983), which is an attack on the natural rights theories of Rothbard and Ayn Rand.
It follows that all modern types of libertarianism or free market economics based simply on a “natural law” or “natural rights” foundation are severely flawed systems (e.g., the systems of Adam Smith or Murray Rothbard). There is no reason to believe that the “natural law” that justifies placing inviolable property rights at the centre of our modern political or economic systems has any validity whatsoever.
In my opinion, Kantian ethics has no real consequences for economics: it can be used to justify numerous economic systems and is fully compatible with social democracy. However, Kantian deontological ethics has severe problems.
A better ethical theory, in my view, is a modern form of utilitarianism called rule utilitarianism (which is quite different from its crude early form as advocated by Jeremy Bentham). Some libertarians or advocates of free market economics actually do use utilitarian arguments to justify their positions and economic systems, e.g., Ludwig von Mises (although Mises’ praxeology was an a priori system of deductive reasoning, independent of his utilitarianism), the earlier Friedrich von Hayek (Gregg 2003: 21–22), and Milton Friedman (Frederick 2002: 23). Thus anyone who uses a utilitarian argument to support ideas about economics will ultimately have to examine the good and bad effects of the policies they advocate.
In these theories, there is no reason in principle why state intervention could not be moral and successful. Any economic argument, then, essentially becomes an argument about empirical reality: the consequences of economic policy today and in the past. The good consequences of state intervention and social democracy fully justify these policies. Of course, philosophical objections have been raised to utilitarianism as well.
One solution may be that we should adopt James Cornman’s Utilitarian Kantian Principle of ethics: this (as I understand it) has caused a great deal of excitement amongst modern philosophers, because it combines the best elements of Kant’s deontological ethics with utilitarianism. It is perfectly compatible with state intervention in economics.
APPENDIX 1: WHAT WAS MARX’S ETHICS?
Marx himself, as I understand it, rejected the utilitarianism of his day for some very confused ideas on ethics (Alan Gilbert, Democratic Individuality, Cambridge University Press, 1990, p. 240). And, at the very least, the question of what ethical theory he believed in is debatable (N. Churchich, Marxism and Morality: A Critical Examination of Marxist Ethics, James Clarke & Co., 1994, p. 139).
Since I don’t advocate communism as preached in the Communist Manifesto, it has nothing to do with my moral argument for certain types of state intervention.
Furthermore, the means Marx advocated to achieve communism (i.e., dictatorship, destruction of freedom of speech and civil liberties) can be rejected on utilitarian grounds anyway, since the abolition of freedom of speech and dictatorship have harmful effects on everyone.
Cornman, J. W., Lehrer, K. and G. S. Pappas. 1992. Philosophical Problems and Arguments: An Introduction, Hackett, Indianapolis.
Frederick, R. 2002. A Companion to Business Ethics,, Blackwell, Malden, Mass.
Gregg, S. 2003. On Ordered Liberty: A Treatise on the Free Society, Lexington, Oxford and Lanham, Md.
Nielsen, K. 1963, “The Myth of Natural Law,” in S. Hook (ed.), Law and philosophy: A Symposium, University Press, New York.
Rollins, L. A. 1983. The Myth of Natural Rights, Loompanics Unlimited.
Scruton, R. 1994. Modern Philosophy: An Introduction and Survey, Penguin Books, London.
Tawney, R. H. 1998. Religion and the Rise of Capitalism, Transaction, New Brunswick, N.J. and London.