Economists as Social Engineers

George F. DeMartino

in The Economist’s Oath

Published in print January 2011 | ISBN: 9780199730568
Published online September 2011 | e-ISBN: 9780199896776 | DOI:
Economists as Social Engineers

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If economists have acted ethically even in the absence of a tradition of inquiry into professional economic ethics, then perhaps there is no pressing need to develop this tradition. This chapter begins a two-chapter demonstration that this is not the case. Indeed, it demonstrates that leading economists violated the most basic and universal professional ethical principles in their interventions in the developing and transition economies during the 1980s and 1990s. In their efforts to promote market liberalization in these economies, economists adopted the utopian “maxi-max” decision rule which subjected communities to extraordinary risk of harm, in disregard of the prudential principle, and which violated their autonomy by denying them meaningful opportunity to give prior informed consent. Moreover, economists engaged in “reverse discounting” by failing to give sufficient attention to short-term adjustment costs. In these ways, their behavior violated the tenets of any imaginable body of professional economic ethics.

Keywords: market liberalization; utopia; maxi-max; Robert Nozick; prudential principle; autonomy; prior informed consent; decision rules; developing countries; transition economies; reverse discounting

Chapter.  8023 words. 

Subjects: Public Economics

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