IDEAS home Printed from https://ideas.repec.org/a/kap/revaec/v36y2023i2d10.1007_s11138-022-00596-7.html
   My bibliography  Save this article

Ethical Economics or Economical Ethics? Considerations out of Carl Menger

Author

Listed:
  • Erik W. Matson

    (Mercatus Center at George Mason University)

Abstract

Carl Menger advanced a narrow definition of exact or theoretical economics. Theoretical economics is the study of the self-interested aspect of human efforts made to meet needs. One implication of this definition, Menger argues, is a strict demarcation between ethics and economics. Menger advances this demarcation against what he calls the “ethical orientation” of the German Historical School. A problem with Menger’s demarcation is that one cannot easily define and operationalize the concept of “self-interest” so as to exclude issues reasonably considered “ethical.” Humans are ethical-rule-following beings. Following rules and abiding by social norms is a part of most people’s “interests” as they themselves understand them. From ideas in behavioral and experimental economics, we see that rules can be constitutive of one’s interests, not just constraining. Ethical sensibilities are not only part of the explanadum in economics, but are, in certain instances, an important aspect of the explanation. Insofar as self-interest interrelates with ethical phenomena, economists, even of the theoretical sort, should pay attention (as did a number of early modern political economists and philosophers) to the following: (1) the ways in which contextual norms of propriety and interests interpenetrate; (2) the sociological and psychological mechanisms by which ethical sensibilities and interests are transmitted; and (3) the differences that ethical sensibilities can make for material or economic outcomes.

Suggested Citation

  • Erik W. Matson, 2023. "Ethical Economics or Economical Ethics? Considerations out of Carl Menger," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 36(2), pages 311-330, June.
    • Handle: RePEc:kap:revaec:v:36:y:2023:i:2:d:10.1007_s11138-022-00596-7
    DOI: 10.1007/s11138-022-00596-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11138-022-00596-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11138-022-00596-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Geoffrey M. Hodgson, 2007. "Meanings of methodological individualism," Journal of Economic Methodology, Taylor & Francis Journals, vol. 14(2), pages 211-226.
    2. Paganelli, Maria Pia, 2011. "The same face of the two Smiths: Adam Smith and Vernon Smith," Journal of Economic Behavior & Organization, Elsevier, vol. 78(3), pages 246-255, May.
    3. Ernst Fehr & Karla Hoff, 2011. "Introduction: Tastes, Castes and Culture: the Influence of Society on Preferences," Economic Journal, Royal Economic Society, vol. 121(556), pages 396-412, November.
    4. Maria Pia Paganelli, 2015. "Recent Engagements with Adam Smith and the Scottish Enlightenment," History of Political Economy, Duke University Press, vol. 47(3), pages 363-394, September.
    5. Field, Alexander James, 1984. "Microeconomics, Norms, and Rationality," Economic Development and Cultural Change, University of Chicago Press, vol. 32(4), pages 683-711, July.
    6. Vernon L. Smith, 1962. "An Experimental Study of Competitive Market Behavior," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 322-322.
    7. Hoff, Karla & Stiglitz, Joseph E., 2016. "Striving for balance in economics: Towards a theory of the social determination of behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PB), pages 25-57.
    8. Don Lavoie & Virgil Storr, 2011. "Distinction or dichotomy: Rethinking the line between thymology and praxeology," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 24(2), pages 213-233, June.
    9. Ernst Fehr & Karla Hoff, 2011. "Tastes, castes, and culture: The influence of society on preferences," ECON - Working Papers 026, Department of Economics - University of Zurich.
    10. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    11. Klein, Daniel B., 2014. "Knowledge and Coordination: A Liberal Interpretation," OUP Catalogue, Oxford University Press, number 9780199355327.
    12. Holmås, Tor Helge & Kjerstad, Egil & Lurås, Hilde & Straume, Odd Rune, 2010. "Does monetary punishment crowd out pro-social motivation? A natural experiment on hospital length of stay," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 261-267, August.
    13. Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-1053, July.
    14. Wilson, James Q., 1993. "The Moral Sense," American Political Science Review, Cambridge University Press, vol. 87(1), pages 1-11, March.
    15. Maria Pia Paganelli, 2015. "Recent Engagements with Adam Smith and the Scottish Enlightenment," Center for the History of Political Economy Working Paper Series 2015-6, Center for the History of Political Economy.
    16. Colin F. Camerer & Richard H. Thaler, 1995. "Anomalies: Ultimatums, Dictators and Manners," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 209-219, Spring.
    17. Ariel Rubinstein, 2006. "A Sceptic's Comment on the Study of Economics," Economic Journal, Royal Economic Society, vol. 116(510), pages 1-9, March.
    18. Samuel Bowles & Sandra Polania-Reyes, 2012. "Economic Incentives and Social Preferences: Substitutes or Complements?," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 368-425, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dold, Malte & Lewis, Paul, 2022. "F.A. Hayek on the political economy of endogenous preferences: An historical overview and contemporary assessment," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 104-119.
    2. Mattauch, Linus & Hepburn, Cameron & Stern, Nicholas, 2018. "Pigou pushes preferences: decarbonisation and endogenous values," INET Oxford Working Papers 2018-16, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    3. Brandts, Jordi & Riedl, Arno, 2020. "Market interaction and efficient cooperation," European Economic Review, Elsevier, vol. 121(C).
    4. Mattauch, Linus & Hepburn, Cameron & Spuler, Fiona & Stern, Nicholas, 2022. "The economics of climate change with endogenous preferences," Resource and Energy Economics, Elsevier, vol. 69(C).
    5. Brandts, J. & Riedl, A.M., 2016. "Market competition and efficient cooperation," Research Memorandum 006, Maastricht University, Graduate School of Business and Economics (GSBE).
    6. Konc, Théo & Savin, Ivan & van den Bergh, Jeroen C.J.M., 2021. "The social multiplier of environmental policy: Application to carbon taxation," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    7. Mattauch, Linus & Hepburn, Cameron, 2016. "Climate policy when preferences are endogenous – and sometimes they are," INET Oxford Working Papers 2016-04, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    8. Fabbri, Marco & Bigoni, Maria, 2021. "How Property Shapes Distributional Preferences," IZA Discussion Papers 14768, Institute of Labor Economics (IZA).
    9. Schmelz, Katrin & Ziegelmeyer, Anthony, 2019. "State coercion and control aversion: An internet study in East and West Germany," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203622, Verein für Socialpolitik / German Economic Association.
    10. Wang, Mei & Rieger, Marc Oliver & Hens, Thorsten, 2016. "How time preferences differ: Evidence from 53 countries," Journal of Economic Psychology, Elsevier, vol. 52(C), pages 115-135.
    11. Matson, Erik W., 2021. "Satisfaction in action: Hume's endogenous theory of preferences and the virtues of commerce," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 849-860.
    12. Alves, Guillermo & Blanchard, Pablo & Burdin, Gabriel & Chávez, Mariana & Dean, Andrés, 2022. "Like principal, like agent? Managerial preferences in employee-owned firms," Journal of Institutional Economics, Cambridge University Press, vol. 18(6), pages 877-899, December.
    13. Stiglitz, Joseph E., 2019. "Addressing climate change through price and non-price interventions," European Economic Review, Elsevier, vol. 119(C), pages 594-612.
    14. Becker, Sascha O. & Ferrara, Andreas, 2019. "Consequences of forced migration: A survey of recent findings," Labour Economics, Elsevier, vol. 59(C), pages 1-16.
    15. Alain Cohn & Michel André Maréchal, 2016. "Priming in economics," ECON - Working Papers 226, Department of Economics - University of Zurich.
    16. Tim Friehe & Markus Pannenberg, 2020. "Time preferences and political regimes: evidence from reunified Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 349-387, January.
    17. Meier, Stephan & Pierce, Lamar & Vaccaro, Antonino & La Cara, Barbara, 2016. "Trust and in-group favoritism in a culture of crime," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 78-92.
    18. Muhammad Badiuzzaman & John Cameron & Mansoob Murshed, 2013. "Livelihood Decisions Under the Shadow of Conflict in the Chittagong Hill Tracts of Bangladesh," WIDER Working Paper Series wp-2013-006, World Institute for Development Economic Research (UNU-WIDER).
    19. João V. Ferreira & Nicolas Gravel, 2017. "Choice with Time," AMSE Working Papers 1729, Aix-Marseille School of Economics, France.
    20. Kremena Bachmann & Thorsten Hens, 2016. "Is there Swissness in investment decision behavior and investment competence?," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(3), pages 233-275, August.

    More about this item

    Keywords

    Carl Menger; Ethics; Economic methodology; Institutions; Behavioral Economics; Adam Smith;
    All these keywords.

    JEL classification:

    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revaec:v:36:y:2023:i:2:d:10.1007_s11138-022-00596-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.