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The ethics behind efficiency

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  • Jonathan B. Wight

Abstract

The normative elements underlying efficiency are more complex than generally portrayed and rely upon ethical frameworks that are generally absent from classroom discussions. Most textbooks, for example, ignore the ethical differences between Pareto efficiency (based on voluntary win-win outcomes) and the modern Kaldor-Hicks efficiency used in public policy assessments (in which winners gain more than losers lose). For the latter to be ethically palatable, society must have in place basic institutions of justice, transparency, and accountability. Normative economics thus requires a pluralist approach that includes considerations of virtue and duty, closer to Adam Smith's Enlightenment conceptions. This surprising finding should embolden economics teachers to engage students with critical thinking problems that are controversial and relevant, and which better prepare students for a complex world.

Suggested Citation

  • Jonathan B. Wight, 2017. "The ethics behind efficiency," The Journal of Economic Education, Taylor & Francis Journals, vol. 48(1), pages 15-26, January.
    • Handle: RePEc:taf:jeduce:v:48:y:2017:i:1:p:15-26
    DOI: 10.1080/00220485.2016.1252294
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    References listed on IDEAS

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    1. Little, I. M. D., 2002. "A Critique of Welfare Economics," OUP Catalogue, Oxford University Press, number 9780198281191, Decembrie.
    2. DeMartino, George F., 2011. "The Economist's Oath: On the Need for and Content of Professional Economic Ethics," OUP Catalogue, Oxford University Press, number 9780199730568, Decembrie.
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    Cited by:

    1. Tadeusz A. Grzeszczyk & Jacek Pełszynski, 2020. "Towards a conceptualization of a social efficiency notion in management sciences," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 19(1), pages 33-46, March.
    2. Hendrik P. van Dalen, 2019. "Values of Economists Matter in the Art and Science of Economics," Kyklos, Wiley Blackwell, vol. 72(3), pages 472-499, August.
    3. Depro, Brooks, 2022. "Making introductory economics more relevant: Using personalized connections to introduce environmental economics," International Review of Economics Education, Elsevier, vol. 39(C).

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