Why economics needs ethical theory

Abstract

Amartya Sen has worked tirelessly to establish the importance of ethics in economics. This chapter adds a little to his arguments. Whenever economics tries to determine how the economy ought to be structured or managed, it makes an ethical judgement. But economists use various devices to hide from themselves their need for ethical theory. The chapter describes and criticizes some of their devices. The main one is to found an account of value on people’s preferences. In this way, economists hope to avoid making judgements of value themselves, but instead leave them to the people. However, this device entails implausible ethical commitments of its own. Economists need to found their recommendations on their best ethical judgements. They must make their judgements explicit, and they must be ready to defend them with good arguments.