Adam Smith on Justice, Social Justice, and Ultimate Justice

August 2017 By in Philosophy, Political Theory

JAMES R. OTTESON

SOCIAL PHILOSOPHY AND POLICY, Volume 34, Issue 1

Abstract: Adam Smith argues that virtue falls into two broad categories: “justice,” which he calls a “negative” virtue because it principally comprises restraint from harming or injuring others; and “beneficence,” which he calls “positive” because it comprises the actions we ought to take to improve others’ situations. Smith’s conception of justice is thus quite “thin,” and some critics argue that it is indeed too thin, since it fails to incorporate substantive concerns for the well-being of others. In this essay, I lay out Smith’s conception of justice and offer a way to understand it that attempts to comprehend the various things he says about it. I then offer a cluster of objections drawing on criticisms that might fall under the heading of “social justice.” Finally, I suggest how Smith might respond to the criticisms by outlining a Smithian conception of what I call “ultimate justice.”

Economic freedom and human capital investment

August 2017 By in Economics, Education, Politics

HORST FELDMANN

JOURNAL OF INSTITUTIONAL ECONOMICS, Volume 13, Issue 2

Abstract: Using data from 1972 to 2011 on 109 countries, this paper empirically studies the impact of economic freedom on human capital investment. Enrollment in secondary education is used as a proxy for such investments. Controlling for a large number of other determinants of education, it finds that, over the sample period, economic freedom had a substantial positive effect. This is probably because more economic freedom increases the return on investing in human capital, enables people to keep a larger share of the return, and, by facilitating the operation of credit markets, makes it easier for them to undertake such investments in the first place.

The Evolution of Culture and Institutions: Evidence From the Kuba Kingdom

August 2017 By in Economics, Politics

SARA LOWES, NATHAN NUNN, JAMES A. ROBINSON, JONATHAN L. WEIGEL

ECONOMETRICA, Volume 85, Issue 4

Abstract: We use variation in historical state centralization to examine the long-term impact of institutions on cultural norms. The Kuba Kingdom, established in Central Africa in the early 17th century by King Shyaam, had more developed state institutions than the other independent villages and chieftaincies in the region. It had an unwritten constitution, separation of political powers, a judicial system with courts and juries, a police force, a military, taxation, and significant public goods provision. Comparing individuals from the Kuba Kingdom to those from just outside the Kingdom, we find that centralized formal institutions are associated with weaker norms of rule following and a greater propensity to cheat for material gain. This finding is consistent with recent models where endogenous investments to inculcate values in children decline when there is an increase in the effectiveness of formal institutions that enforce socially desirable behavior. Consistent with such a mechanism, we find that Kuba parents believe it is less important to teach children values related to rule-following behaviors.

Sentiments, Conduct, and Trust in the Laboratory

August 2017 By in Economics

VERNON L. SMITH and BART J. WILSON

SOCIAL PHILOSOPHY AND POLICY

Abstract: In this essay we provide a brief account and interpretation of The Theory of Moral Sentiments showing that it departs fundamentally from contemporary patterns of thought in economics that are believed to govern individual behavior in small groups, and contains strong testable propositions governing the expression of that behavior. We also state a formal representation of the model for individual choice of action, apply the propositions to the prediction of actions in trust games, report two experiments testing these predictions, and interpret the results in terms directly related to the model. In short, we argue that the system of sociability developed by Adam Smith provides a coherent non-utilitarian model that is consistent with the pattern of results in trust games, and leads to testable new predictions, some of which we test.

A liberal theory of externalities?

August 2017 By in Economics, Philosophy

CARL DAVID MILDENBERGER

PHILOSOPHICAL STUDIES

Abstract: Unlike exploitative exchanges, exchanges featuring externalities have never seemed to pose particular problems to liberal theories of justice. State interference with exchanges featuring externalities seems permissible, like it is for coercive or deceptive exchanges. This is because exchanges featuring negative externalities seem to be clear cases of the two exchanging parties harming a third one via the exchange—and thus of conduct violating the harm principle. This essay aims to put this idea into question. I will argue that exchanges featuring negative externalities are not unjust in this straightforward way, i.e. because they would constitute an instance of wrongfully causing or risking a bodily or material harm. In fact, unless we are subscribing to particularly demanding variants of liberalism—e.g. perfectionist liberalism—or unless we are exclusively focusing on borderline cases of externalities—i.e. of effects of exchanges hardly to be called externalities—there is no liberal theory of how exchanges featuring externalities are unjust.

How Not to Argue for Markets (or, Why the Argument from Mutually Beneficial Exchange Fails)

August 2017 By in Philosophy 1 Comment

JAMES STACEY TAYLOR

JOURNAL OF SOCIAL PHILOSOPHY, Volume 48, Issue 2

Abstract: In recent years, there has been considerable debate concerning the legitimate scope of market transactions. Markets in many goods that are usually held to be market-inalienable (including sex, human organs, sweatshop labor, women’s reproductive labor, humans, and votes) have all had their defenders—and detractors. Despite the variety of these “contested commodities,” one defense of the view that markets in them are morally legitimate is almost ubiquitous in the philosophical literature on the moral limits of markets. This “Argument from Mutually Beneficial Exchange” is simple. If a trade is voluntary, neither party would have participated in it unless they ex ante expected to benefit from doing so. Hence, provided that the trade in question does not violate the rights of any third party (e.g., it is not the sale of an assassin’s services) then a moral concern for the welfare improvement of each of both parties through the trade prima facie supports its moral permissibility. Taylor argues that this argument should be rejected. This is because it is based on illegitimately inferring from the fact that persons would prefer to trade in a good rather than not given the existence of a market in that good to the conclusion that consideration for the well-being of the would-be trading parties justifies allowing the market in question.

Moral markets: A marginalistic interpretation of Adam Smith

July 2017 By in Economics, Philosophy

WALTER G. CASTRO, RAFAEL E. BELTRAMINO

THE REVIEW OF AUSTRIAN ECONOMICS

Abstract: The article is built upon James Otteson’s analogy between the structure of moral and economic rules. In Otteson’s interpretation of Adam Smith’s works both of them develop from an exchange of information of interacting agents. We develop that concept about Adam Smith’s Theory of Moral Sentiments, analyzing those exchanges, and considering them Moral Market processes, in the Austrian Tradition of markets as processes. We think that Smith’s emphasis on graduality and his metaphor of the Impartial Spectator allows us to propose a marginalistic approach to those markets stating how, in some of them which we call moral exchanges of justice, and through a great number of exchanges, moral rules of justice emerge. Finally, we present the problems that arise when legislation tries to change the results of these exchanges, in what we called a price control in the moral market.