Friday, December 31, 2010

Sewell Chan: Economists consider ethics code

It's about time.  I do think it is a good thing when economists participate in both business and policy--such things inform both teaching and research.  But disclosure is important.  We may all think of ourselves as forthright and objective, but we are in fact shaped by experiences (and as economists never cease to remind us, by our paychecks).  Gary Becker's line in Chan's piece about replicability curing all ethical problems doesn't really hold up, because lots of economic theory has never been or has been inadequately tested against data (George Akerlof does a very good job demonstrating this in his AEA Presidential Address from 2007).

We seem as a profession to have a difficult time dealing with ethics--it makes us squeamish, because mainstream economics often celebrates avarice.  But one of Adam Smith's earth shattering works was called The Theory of Moral Sentiments, so he wasn't squeamish about thinking about such things as all.

I have within this blog from time-to-time disclosed my relationships when such things might matter to what I am writing.   The two most important are with Realtors (when I was a graduate student I worked for the Wisconsin Realtors Association, and I was a consultant on Existing Home Sales in the late 1990s and early 2000s) and with Freddie Mac (where I worked for less than a year and a half in 2002-03).  My center at USC has a large number of donor members.   I have also consulted for the World Bank.  These relationships have been rewarding to me financially and intellectually, and while I like to think I play things straight, I would be foolish to pretend that these experiences have had no influence on my outlook.  I leave it to readers to determine the impact of such influence on the validity of what I write.


Kien said...

I think the "economics profession" could look around and observe that engineers, doctors, lawyers, accountants and architects all have professional associations that do their best to take ethics seriously. I know lawyers and accountants have to do a course on ethics before admission into the profession, and I imagine it would be the same for the other professions.

What makes some line of work a "profession"? At its heart is some recognition that there is some asymmetry in power between the professional and his/her client, and that the wider public interest is affected by the professional's conduct.

If economists like to think of themselves as a profession, it would be odd if they cannot see a place for ethics in their work and training. It's not merely about disclosing conflicts of interest. It would also include ensuring that any advice given is not misleading or selective. The AEA should also think about requiring its members to take a course on ethics, which the AEA could perhaps develop with the help of philosophers.

William Rey Ong said...

Sewel Chan is a good speaker, you will really inspire on his speeches. We should hear more from him.

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