Volume 44, Number 175,
October-December 2013
Challenging Conventional Economics:
An Ethical Development Paradigm
Nikos Astroulakis

A methodology refers to the techniques and processes through which the modus operandi of a study can be illustrated. For development ethics, this includes the framework to examine development in the context of social economics through its ethical approach.

The use of the term "paradigm" can only be defined in general as any sort of theoretical or philosophical framework. More specifically, the development ethics paradigm refers to a "scientific" model, that can be seen as a philosophical or theoretical framework within which theories, laws, generalizations and the applications that support the field can be formed. Within the epistemological perspective of social sciences, it is generally accepted that the complexity of the real world cannot fully be captured by scientific paradigms. Rather, the need to understand the world gives rise to the paradigms. As a result, a paradigm is usually a simple representation of the process by which a complex system operates (Barrat-Brown, 1995: 1). Consequently, in social sciences, a paradigm is a theoretical framework based on simplifications that try to codify and explain the laws that govern the real world.

Another important aspect is the relationship between objectivity and subjectivity and the ideology of social science paradigms, as clearly different ideological and theoretical patterns can reflect the real world in different ways. “Thus, one’s view of the nature of historical change – its structure, sequence and casual mechanism – will colour one’s view of the permitted limits and permissible forms of generalizations” (Dobb, 1973: 22). In response, Kuhn (1970: 15) said, “History suggests that the road to a firm research consensus is extremely arduous.” Subjectivity and ideology are at the center of the discussion. The history of economic thought has clearly shown that the adjective “social” (social sciences, social economics, social reality, etc.) is not neutral.

As a result, the prevailing ideology and general acceptance of certain social theories is a matter of the degree to which a scientific paradigm adequately reflects reality through its explanations of social and political factors. Based on the pluralism of values of social economics, the development ethics paradigm can therefore be understood as a coherent synthesis of multiple traditions of scientific research and the achievements that, for the moment, address the problems and solutions of a group of social scientists and philosophers that share and subscribe to the values, beliefs and techniques of the scientific paradigm at hand.

With respect to subjective and ideological parameters, the development ethics paradigm follows a normative analysis of the economy, even for its applications. With regards to "normative" analysis, even in cases of positive economic analysis, with statistical data, for example, normative judgments and assumptions are included. That is why in normative economic analysis, "not only do moral principles bear on issues concerning evaluation and policy, but they also influence the questions positive economists ask and the answers they find plausible" (Hausman and McPherson, 1993: 672). Once again, the issue of whether economics is morally neutral or not comes into play.

The question can be posed differently: Is economics a positive or social science? If we accept, as we have, the social nature of economics, this premise leads directly to a normative analysis. In any case, even for those that believe that economics is a positive science, normative analysis and morality influence positive analysis, at least as Hausman and McPherson have described it:

  1. The morality of economic agents influences their behavior and hence influences economic outcomes. Moreover, economists' own moral views may influence the morality and the behavior of others in both intended and unintended ways. Because economists are interested in the outcome, they must be interested in morality.
  2. Standard welfare economics rests on strong and contestable moral presuppositions. To assess and to develop welfare economics thus requires attention to morality.
  3. The conclusions of economics must be linked to the moral commitments that drive public policy. To understand how economics bears on policy thus requires that one understand these moral commitments, which in turn requires attention to morality.
  4. Positive and normative economics are frequently intermingled. To understand the moral relevance of positive economics requires an understanding of the moral principles that determine this relevance.

Ethics can be seen as a "study of the human," or how human beings live and interact in the society they have created. In this text, ethics is linked to development, which is approached from the perspective of social economics. Social economics, in turn, is seen as an acceptable economic alternative to positive mainstream economics, whose line of thinking is represented by neoclassical economics. Ethics is therefore part of the field of social economics. But why must ethics be defined in an economic context separate from mainstream economics?

Mainstream economics maintains that ethics interfere with the economy only in terms of people’s selfish rationality. The homo economicus hypothesis, the perception of human beings as rational, self-interested beings, assumes that people are concerned with increasing their own utility through rational choices and individual preferences. As such, mainstream economics accepts ethical determinations in an individualistic and subjective way under the logic of rational choice. This happens on the micro level. On the macro level, neoclassical public choice theory offers a framework to measure the social interests of groups and decision-making for the public. In a broad sense, neoclassical ethics is individualistic and reductionist, where society is merely the sum of its individuals.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 192, January-March is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Feb 23th, 2018.
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