Values in the Economy

In America, there are many who act as though discussion about economic systems should be value free - just as there is no point in injecting values into discussions about the movement of electrons, there should be no injecting values into discussions about the movement of labor or capital. Markets should be efficient and that's it - right? Maybe not.

Lawrence Mishel writes for Prospect:

An economy can be structured in many different ways and yet achieve the same amount of efficiency, i.e., produce the same outputs with the same inputs. This was the conclusion of a book that Rebecca Blank edited for the National Bureau of Economic Research (NBER) a decade ago. Major European countries, for example, have a set of policies that are far different from ours: a strong social insurance system, government provision of health care, higher taxes, and far less inequality. Yet these countries have seen faster productivity growth -- the gain in economic efficiency -- than the United States for most of the last four decades. At first, this trend was mainly a process of "catching up" to the United States, the technological leader. However, many of these countries have now surpassed the United States in productivity.

[E]ven if income were distributed according to merit or to the value of one's skills, we would still need to care for those worst-off and guarantee them a decent standard of living. Moreover, children do not start off with the same amount of resources -- monetary assets or family "social capital" -- so economic outcomes depend at least as much on background as on effort or character.

The social class a person belongs to really matters -- it determines your health, how long you live, where you live, your exposure to crime, your success in school, and the likely success of your children. A task force of the American Political Science Association has recently concluded that inequality in income and resources translates into inequalities in participation and effectiveness in our democracy.

This leads me to think that economic issues are just as much "values" issues as any of those that are more frequently discussed. Moreover, the teachings of the various faiths have much to say on economic matters. I daresay that there's no reason to believe that unfettered markets provide us with the type of society our faiths guide us to have in terms of the lives of the poor, the treatment of workers, and the solidarity of our communities.

How a society structures its economy absolutely says something about what that society does and does not value — there’s just no way around it. Any attempt to argue that values have no place in economic discussions is merely an attempt to ensure that the status quo is not challenged or questioned.

Read More:

• Guide to Ethics and Morality
• News About Ethics
• Ethics and Culture