Economic Analysis, Moral Philosophy, and Public Policy, 3rd Edition

This book shows through argument and numerous policy-related examples how understanding moral philosophy can improve economic analysis, how moral philosophy can benefit from economists' analytical tools, and how economic analysis and moral philosophy together can inform public policy. Part I explores the idea of rationality and its connections to ethics, arguing that when they defend their formal model of rationality, most economists implicitly espouse contestable moral principles. Part II addresses the nature and measurement of welfare, utilitarianism and cost-benefit analysis. Part III discusses freedom, rights, equality, and justice - moral notions that are relevant to evaluating policies, but which have played little if any role in conventional welfare economics. Finally, Part IV explores work in social choice theory and game theory that is relevant to moral decision making. Each chapter includes recommended reading and discussion questions.

“Advance praise: 'The new edition of the book by Hausman, McPherson, and Satz is a rich and needed reading of economic analysis from the viewpoint of moral philosophy. Economists, if they reflect on these issues at all, think of their work as akin to physics; we find the pre-existing laws which govern the economic world. They can be considered simply as factual relations interesting in their own right; they can be used, as electricity, to serve human ends. What the authors demonstrate by detailed examination is that the analysis itself is shot through with normative and philosophical considerations. Any thoughtful reader will find his or her presuppositions challenged.' Kenneth J. Arrow, Stanford University”

'The new edition of the book by Hausman, McPherson, and Satz is a rich and needed reading of economic analysis from the viewpoint of moral philosophy. Economists, if they reflect on these issues at all, think of their work as akin to physics; we find the pre-existing laws which govern the economic world. They can be considered simply as factual relations interesting in their own right; they can be used, as electricity, to serve human ends. What the authors demonstrate by detailed examination is that the analysis itself is shot through with normative and philosophical considerations. Any thoughtful reader will find his or her presuppositions challenged.' Kenneth J. Arrow, Stanford University, California, and Winner of the 1972 Nobel Prize in Economic Sciences
'It is a tragedy that mainstream economists have mostly lost touch with philosophy, and with the ethical basis for what they do. This book is the perfect way to make repairs and to catch up. It should be read by all economists, and required reading for those who make policy recommendations.' Sir Angus Deaton, FBA, Princeton University, Fellow of the Royal Society of Edinburgh, and Winner of the 2015 Nobel Prize in Economic Sciences
This is an indispensable guide to the intersection of economics and philosophy: clear, rigorous and myth-busting. But it is much more than a guide. For it not only analyses the relevant debates but develops their arguments. It is a work of scholarship: a major contribution to both disciplines.' Sir Julian Le Grand, London School of Economics
'Economic Analysis, Moral Philosophy, and Public Policy offers a comprehensive review of the intersections of moral philosophy with economics. The authors expertly combine accessibility with sophistication in analyzing topics ranging from foundational issues of welfare economics, rationality, game theory, and distributive justice to public policy problems such as pollution, school vouchers, health care, and unemployment. This is a superb book.' Elizabeth Anderson, University of Michigan, Ann Arbor

Daniel M. Hausman is the Herbert A. Simon and Hilldale Professor of Philosophy at the University of Wisconsin, Madison. A founding editor of the journal Economics and Philosophy (with Michael McPherson), his research has centered on epistemological, metaphysical, and ethical issues at the boundaries between economics and philosophy. He is the author of Capital, Profits, and Prices (1981), The Inexact and Separate Science of Economics (1992), Causal Asymmetries (1998), Preference, Value, Choice, and Welfare (2012), and Valuing Health: Well-Being, Freedom, and Suffering (2015). Michael S. McPherson is President of the Spencer Foundation and Past President of MacAlester College, Minnesota. He co-founded the journal Economics and Philosophy with Daniel Hausman and has worked on problems on the borders of economics and philosophy. He is co-author of six books on higher education policy and economics, including Lesson Plan: An Agenda for Change in Higher Education (with William G. Bowen, 2016), Crossing the Finish Line: Completing College in America's Public Universities (2009), and The Student Aid Game: Meeting Need and Rewarding Talent in American Higher Education (1998). Debra Satz is the Marta Sutton Weeks Professor of Philosophy and Ethics in Society at Stanford University, California, where she is also the Senior Associate Dean for Humanities and Arts. Her research interests include the moral limits of the market, the nature of equality, and the public/private boundary. She is the author of Why Some Things Should Not Be for Sale: The Moral Limits of Markets (2010), and the co-editor of Toward a Humanist Justice: The Political Philosophy of Susan Moller Okin (with Rob Reich, 2009) and Occupy the Future (with David Grusky, Doug McAdam and Rob Reich, 2013) and is the author of numerous articles.

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