Edd Noell

In Pursuit of the Just Wage: A Comparison of Reformation and Counter-Reformation Economic Thought

Students of economic thought have long associated with the fifteenth and sixteenth centuries the spread of attitudes in Europe more tolerant of market processes. New economic attitudes appear in a variety of literary forms during the fifteenth century (McGovern 1970). As compared to the pronouncements of a number of Patristic figures, relatively greater tolerance of commerce is expressed by medieval theologians. In fact, recent scholarly efforts suggest that by the late thirteenth century, suspicions of economic activity remained, but Scholastic thinkers increasingly recognized the importance of an impersonal market process in everyday life and sought to find ways to understand it in light of their concern with natural order (Kaye 1998a). While condemning avarice, Scholastic writers such as San Antonino of Florence and San Bernadino of Sienna explicitly endorsed trade as legitimate when practiced for the common good and when associated with modest profit (Origo 1962; De Roover 1967). Recognition of this movement in thought, especially as it applied the concerns of economic justice to trade in commodities, is explicit in the literature of preclassical economics. But until recently, less attention has been paid to more specific developments in scholastic thinking on justice in the labor market.

Adam Smith on Economic Justice in the Labor Market

One of the most significant statements in Joseph Schumpeters discussion of Adam Smith in the History of Economic Analysis highlights the impact of scholastic thought upon Smiths economic analysis. Speaking of The Wealth of Nations, Schumpeter claimed that “the skeleton of Smiths analysis hails from the scholastics and natural-law philosophers†(Schumpeter 1954, p. 182). Though not the first to make this connection, Schumpeters affirmation, alongside his treatment (ibid., part II, ch. 2) of the literature produced by these two groups, has been a stimulus to further exploration with respect to both the Protestant scholastics Hugo Grotius and Samuel Pufendorf and the medieval theologians (De Roover 1957; Bowley 1973). More recent studies which have followed in this vein have focused on the significance of the scholastic and natural law traditions for Smiths treatment of economic justice (Hont and Ignatieff 1983; Young and Gordon 1992).

Reckoning with Markets: The Role of Moral Reflection in Economics

Undergraduate economics students begin and end their study of economics with the simple claim that economics is value free. Only in a policy role will values and beliefs enter into economic work; there can be little meaningful dialogue by economists about such personal views and opinions. This view, now well over 200 years old, has been challenged by heterodox thinkers in economics, and philosophers and social scientists outside the discipline all along the way. However, much of the debate in modern times has been narrowly focused on philosophical methodological issues on one hand or theological/sectarian concerns on the other. None of this filters down to the typical undergraduate even in advanced courses of the history of economic thought. This book presents the notion that economic thinking cannot escape value judgments at any level and that this understanding has been the dominant view throughout most of history. It shows how, from ancient times, people who thought about economic matters integrated moral reflection into their thinking. Reflecting on the Enlightenment and the birth of economics as a science, Halteman and Noell illustrate the process by which values and beliefs were excluded from economics proper. They also bring the reader up to date, given the changes over the last half-century. With the advent of interdependency concepts and game theory, behavioral economics and the infusion of other social sciences, especially psychology, into economic considerations, the door is once again open to moral reflection. It is a sensitive subject that can be divisive for many and there is little if any assessable literature on the topic at the undergraduate level. One way to approach the subject is to follow the path of the great thinkers of the past and observe how they worked through economic issues from a set of values that was foundational to their thinking. This places moral thinking in a context illuminating the complexity and importance of moral reflection and illustrating its impact on the culture of the times. Reckoning With Markets follows this method with a deliberate effort to cast the material in terms that will engage the undergraduate student. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/9780199763702/toc.html

Expanding and Reorienting the Scope of Economic Thinking

This chapter traces efforts to expand the approach of economic thinking to political, legal, social, and religious institutions. Using rational choice analysis, these efforts move the discussion closer to valueladen areas of life. One important concern is the nature of the utility function, how it is formed, and what is utility or happiness?[CE1]Social norms, cooperation models, game theory, behavioral economics, and neuroeconomics all have something to say about human behavior,and they also have important moral ramifications. While some claim that behavioral responses in these cases are merely self-interest disguised, outward behavior seems to work best in the long run if it is heartfelt. Character traits that signal trust are strongest when backed by moral commitments, and there is evidence that human brains are hardwired with some empathetic tendencies. The work of Dan Kahneman and AmartyaSen is highlighted in the closing vignettes.

Heterodox Economics and the Varied Manner of Moral Reflection

Heterodox economics presents alternative critical explanations for the driving forces behind capitalism. The chapter examines the distinctive moral reflections expressed by Karl Marx, Thorstein Veblen, and Friedrich Hayek. Marx’s historical materialism relies on dialectical reasoning to explain class struggle and economic change. His valuation of human autonomy, as ultimately manifested in communism, drives his moral critique of capitalism. Veblen’s understanding of the complex instincts underlying economic activity lays a path for more extensive incorporation of moral reflections in economics. Yet his evolutionary economics posits no final purpose in human economic activity. Hayek challenges the perfect information assumption of neoclassical economics, finding that competitive markets continually generate new information that creates disequilibrium. His reflections on the origins of moral codes and critique of collectivist planning affirm the superiority of the norm of liberty. The chapter concludes with the vignette “Karl Marx: Can a Materialist Produce a Moral Critique of Capitalism?”

Economic regulation and the late nineteenth-century Supreme Court: An economic interpretation of the relation between police powers and substantive due process

Abstract The late nineteenth-century Supreme Court rulings on the constitutionality of state labor laws offer a fertile field for application of models of economic regulation. This study examines several key decisions, including the rulings on the famous Slaughterhouse Cases (1873) and the case of Butchers Union Co. v. Crescent City Co. (1884), which marked out the Courts approach to the economic due process clause in the Fourteenth Amendment. The interest group model of regulation is found to be of limited value in understanding the Courts limitations on state police powers. It is argued instead that the market failure model, as interpreted in the framework of the common laws approach to economic regulation, provides a more credible explanation of the Courts opinions. They are better understood in light of the common law distinction between the legitimate and illegitimate application of regulation under state police powers.