What is 'Good' in Economics?
Although not a deliberate alignment, this week's line up all gravitated around a reckoning of the 'good' in economics. I listened to some eminent thinkers and published writers talking about "Morality and Economics" at the Philadelphia Convention Center, spent some time at St Ignatius Loyola, a Jesuit school on Park Ave, NYC, travelled to Washington where the Global Financial Literacy Excellence Center is based and visited some of the great monuments and memorials there. After a 21 hour "Planes, trains and automobiles" replay we arrived in London.
The GFC has figured large this week in identifying what is the good of economics in a great many discussions, both spontaneous and prepared. In "Keynes: The Return of the Master", Skidelsky explores the renaissance of Keynesian economics after the GFC and strengthens his support for that resurgence in governments protecting society from risk, advocating regulation against short-term speculation. With female economists in the minority and as some studies suggest (see here), they not only have different opinions to men, they are less sceptical of regulation. It seems that without women the diversity of opinion for government policies will be limited. Skidelsky makes a compelling argument that government policy should be fuelled by a moral imperative, referring to Keynes' assertion that making "the world ethically better was the only justifiable purpose of economic striving" (p. 131). The Franklin D. Roosevelt Memorial in bold brass and stone said exactly the same thing. The eloquence of Martin Luther King Jnr was beautifully displayed, echoing a similar sentiment. It reminded me that all great leaders and thinkers are directed by their moral compass. If economics is a leader, we would expect the same from it as a discipline. If a gender bias skews policy direction away from redistribution, then it has lost direction.
FDR was clear:
Living a good life is not necessarily about the pursuit of material wealth, it lives in what makes people good. Teaching economics from this perspective can be a powerful experience for teachers and students. It also hones in on the human dynamics of economics. If there are less girls opting in for economics because they are sceptical about the discipline, we need to broaden its brief by focussing on the moral imperatives in its curriculum, pedagogy and assessment.
In Kaushik Basu's session at ASSA, (link here) he laid down a foundation principal that:
"Morality is the essential glue that holds society together and enables self-interest to drive growth and markets to function".
Self-monitoring behaviour, where morality is at play, influences decision making that avoids cheating. It began with Aristotle but Smith in "Theory of Moral Sentiments" recognised that without a moral conscience, markets cannot work. Morals help us ask "What can I do?", ethics establish "What is good?" Economics can explain "What is good for us?" Economics should "offer some flavor of history and moral philosophy: enough history that students are not ignorant, enough sociology and anthropology that students are not morons, and enough politics and philosophy that students are not fools." (Click for link) This broader perspective on economics echoes where cognitive science is taking education. Socio-constructivist learning is about how genuine learning is heuristic and collaborative, an iterative process between students, teachers and society. To embrace learning in this paradigm the curriculum needs a pluralist perspective anchored by genuine intentions that can only derive from an ethical perspective.
In an economics framework, the students at Loyola said it looked like this:
In a candid discussion about economics in the classroom, the Loyola students expressed their concerns around economic mechanisms and processes and how it related to their lives. They were searching for economic's moral compass: how does our prosperity affect people in developing countries, how can we invest in education for a better life, how can we protect our environment and still raise living standards?
With the icy and inclement weather I could not get over to The George Washington University but it is worth watching this FinLit Talk from the Global Financial Literacy Excellence Center. The Q & A session covered all the key concerns that the female students from Loyola expressed.