Ethics in economics: principles and applications

Ethics in Econ II

Defining Ethics

There is no set definition for the term "ethics," much less for "good ethics" and "bad ethics." Like many aspects of the human condition, ethics are in the eye of the beholder. The two main schools of ethics are deontological and consequential. The former is focused on the right and wrong of actions; the latter on the right and wrong of outcomes. Economics is the study of economic systems - means of production, flows of goods and money. Perhaps surprisingly, the two studies intersect frequently. Both economics and ethics attempt to strike a balance in outcomes of actions. You can find both economists and philosophers weighing issues such as the valuation of life and the merits of ensuring equality for all (Broome, 1999).

As a result of this intersection, economic viewpoints are often colored by the ethics of the writer. When Milton Friedman wrote about the social role of corporations, the article bore a strong influence of his core libertarian worldview. We can see this when he likens spending on non-profit generating activities as a form of taxation (Friedman, 1970). Friedman's views were well-known at the time, so his perspective was understood by the audience. Since that time, however, there has been a proliferation of non-government think tanks whose views are not always widely understood.

These think tanks have arisen to promote their worldviews, but often those worldviews remain hidden, or known only to those who take the time to learn about them. Despite claims of objectivity, those reports tend to support their worldview. Complicating matters, however, is the reason most of think tanks has arisen. Many have arisen as a response to bias in governmental research organizations. The thinks tanks exist, in theory, as an independent voice. They exist on all sides of the economic spectrum, from far left to far right, although it is generally accepted that right-leaning think tanks outnumber left-leaning ones.

The question, however, is not whether having a bias or even hiding a bias constitutes unethical behavior. Every view expressed is imbued with some bias. The main ethical issues with regards to economic think tanks, the research they publish and ethics are the disclosure of bias and the sources of bias.

Most economic think tanks exist to influence public policy.

Some provide direct guidance to politicians on economic matters; others attempt to sway public opinion.

At the core of the ethical quandary is the funding system for these non-governmental think tanks. Most are financed by large corporations. When these think tanks then publish research that supports the views held by their corporate backers, this represents a significant ethical issue. From a deontological perspective, the issue revolves around whether or not the research was designed to eliminate the known biases of the researchers. Research of any type should be, in order to meet any reasonable code of ethics, objective. This means that bias should be omitted from the experiment design, data analysis and data interpretation (Resnick, 2007).

From the consequential perspective, the research conducted by economic think tanks is generally intended to influence public policy (Fetherling, 2008). This impacts the entire citizenry, not just the think tank or its backers. Again, we reach the intersection between classical ethics philosophy and economics. Whether or not a think tank strives to eliminate bias from its published research, if that research influences public policy to the detriment of the populace, it would be considered unethical. Resnick (2007) promotes the idea that research ethics are important to maintain the trust of the public in such research. When considering the outcomes of published research, we must then consider whether an economic think tank bears any duty of care towards the populace at large.

It such a duty of care is not owed to the populace, to whom is it owed? This brings back the question of motivation. Basic motivation theories such as Maslow's Hierarchy discuss motivation in terms of human needs (NetMBA.com, 2007). Applied to an organization, we find the heart of the ethical quandary surrounding economic think tanks. Think tanks are motivated in part by their need to survive. Their existence depends on financial backing, provided by a variety of corporations.