Is Economics "Morally Debased"? Do Economists Teach Evil?

"You betcha'," says communitarian scholar Amitai Etzioni


Money Evil

Communitarian scholar Amitai Etzioni reviews in the Sociological Forum decades of studies that find that thinking like an economist more or less equals moral corruption and debasement. Etzioni's article, "The Moral Effects of Economic Teaching" reports that "a broad range of studies have found economics students to exhibit a stronger tendency toward antisocial behaviors relative to their peers."

In what sort of unsavory practices do those schooled in the dark arts of supply and demand indulge? Among other things, they tend to defect more in prisoners dilemma games, contribute less than a "fair" amount in games involving the maximumization of common pool investments, offer a less "fair" split in ultimatum games, contribute less to consolation prizes for losers in a lottery game, and admit on surveys that they are less likely than non-economics students to report being undercharged for a purchase or return found money to its owner.

More damningly they are just not socially consciousness:

A survey conductedby Gandal, Roccas, Sagiv, and Wrzesniewski (2005) ?nd that economics students valued personal achievement and power more than their peers while attributing less importance to social justice and equality. Rubinstein (2006) reports that economics students were much more likely to favor pro?t maximization over promoting the welfare of workers when faced with a business dilemma. Faravelli (2007) ?nds that economics students were signi?cantly less likely to favor egalitarian solutions to problems than their peers outside of economics. Haucap and Just (2010) ?nd that asurvey of economists revealed they were more likely than their peers to consider the allocation of scarce resources in accordance with who can a?ord to pay the price set by supply and demand to be a fair method of rationing and distributing resources. And Bauman and Rose (2011) report that economics majors are less likely to donate to local social programs.

The horror!

Next Etzioni considers the crucial question: Is economic thinking the result of inborn defects or indoctrination? The data are mixed:

One may ask whether studying economics is a cause of moral debasement. The ?ndings cited so far could re?ect not an indoctrination e?ect of teaching economics, but rather, a selection effect whereby students prone to immoral behavior are more likely to choose to study economics than more moral students. Carter and Irons (1991:174), for example, note that sel?sh behavior exhibited in the ultimatum game was already present in entering economics ?rst years, contending that "economists are born, not made." The general consensus among researchers is that if there is an indoctrination e?ect, it ought to manifest itself in the form of students with greater exposure to economics expressing more pronounced antisocial behavior. Frey et al. (1993) note no di?erence in evaluations of the fairness of a price increase between beginner and advanced economics students, thus endorsing the selection hypothesis. Frank and Schulze (2000) ?nd that older and younger economics students are equally corruptible, suggesting a selection e?ect rather than indoctrination. And Gandal et al. (2005: 1237) ?nd that entering economics students' tendency to endorse more self-interested normative values did not intensify after completing a year of economics education—?ndings that provide "support for a self-selection process."

In contrast, a set of other studies do ?nd evidence of an indoctrination e?ect. Frank et al. (1993) report that, while defection—that is, playing a "dominant" strategy that will leave a player better o? independent of his or her opponent's strategy but, if chosen by both players, will leave him or her worse o? than if both had chosen a di?erent strategy—by noneconomics students in the prisoner's dilemma game steadily declines with education, the rate of defection for economics students remains constant.

Etzioni concludes:

Finally, one should note that not all economists will agree that what is considered here "debasing" is actually debasing. Some share with libertarians the conservative, laissez-faire view that, if everyone will follow their own self-interest and seek pleasure, the invisible hand will ensure that the greatest happiness for the greatest number is realized. Some even go so far as to argue that greed is good. If anybody doubted that this viewpoint is mistaken, the economic developments since 2008 should have disabused them of this notion.

Really? A financial crisis brought on in part by the collapse of a government-fueled housing boom somehow discredits economics?

Etzioni completely misses the plain fact that there is no such thing as a rich socialist country. Enabling people to freely pursue their own self-interests is the only formula that has ever produced sustained economic and, yes, moral progress.

Disclosure: As an undergraduate I double-majored in economics and philosophy.