The economics of ethics

The relationship between ethics and economics is closer than it may seem

Another semester comes to an end, in which I had the pleasure to engage with students on the topic of Ethical and Evidence-based Decision Making, a subject that regular readers might know is close to my heart. Naturally, we spend a good deal of the time discussing sources and types of evidence, and how inappropriately applied heuristics, uninformed intuition, emotion, and of course a large array biases can distort our decisions. That is how we typically tend to understand the challenges of good decision-making. But it is when we introduce ethics that things become really, really interesting. Why? Because many decisions, and certainly the most difficult ones, have an important, and inevitable ethical dimension. Once you realize this, you cannot unsee the innumerable ethical decisions all around you (and likely involving you).

The students ponder hypothetical questions like whether it is ethical or not for a Canadian investor to buy shares in a US arms manufacturer, speculating on impending unrest, or for a university professor who believes grading students’ work is archaic and punitive, to hand out “A” grades to everyone. But the on-going strike action in the UK by public sector workers, notably railway and postal workers, is also an excellent example of…