THE VALUES OF ECONOMICS Economics has often been accused of losing its connection to some of the basic characteristics of human behaviour: commitment, emotion, deliberation and the different forms of interaction through which human actors in economic life provide for themselves and for others. With an aim to bring caring back into economic theory, Irene van Staveren draws upon the work of Aristotle and Amartya Sen’s notions of capability and commitment to propose an alternative methodology to utilitarianism that is not normative. In his Ethics, Aristotle argued that human beings try to further a variety of values by balancing them, stating that people try to find a middle road between excess and deficiency The author develops and applies this idea to the values of economics, arguing that in the economy freedom, justice and care are also balanced to further ends with scarce means. Freedom is furthered through market exchange, justice through a redistributive role of the state, and care through mutual gifts of labour and sharing of resources in the economy. This book argues that economics is, and has always been, about human values, which guide, enable, constrain and change economic behaviour. The Values of Economics will appeal to advanced students and professionals with an interest in economics, philosophy and gender studies. Irene van Staveren is Lecturer in labour market economics of developing countries at the Institute of Social Studies in The Hague. She won the Gunnar Myrdal Prize 2000 for her dissertation Caring for Economics: An Aristotelian Perspective, from which this book evolved. ECONOMICS AS SOCIAL THEORY Edited by Tony Lawson University of Cambridge Social theory is experiencing something of a revival within economics. Critical analyses of the particular nature of the subject matter of social studies and of the types of method, categories and modes of explanation that can legitimately be endorsed for the scientific study of social objects are reemerging. Economists are again addressing such issues as the relationship between agency and structure, between the economy and the rest of society, and between the enquirer and the object of enquiry. There is a renewed interest in elaborating basic categories such as causation, competition, culture, discrimination, evolution, money, need, order, organisation, power, probability, process, rationality, technology, time, truth, uncertainty, value and so on. The objective for this series is to facilitate this revival further. In contemporary economics, the label ‘theory’ has been appropriated by a group that confines itself to largely asocial, ahistorical, mathematical ‘modelling’. Economics as Social Theory thus reclaims the ‘theory’ label, offering a platform for alternative rigorous, but broader and more critical, conceptions of theorising. Other titles in this series include: ECONOMICS AND LANGUAGE Edited by Willie Henderson RATIONALITY, INSTITUTIONS AND ECONOMIC METHODOLOGY Edited by Uskali Mäki, Bo Gustafsson and Christian Knudsen NEW DIRECTIONS IN ECONOMIC METHODOLOGY Edited by Roger Backhouse WHO PAYS FOR THE KIDS? Nancy Folbre RULES AND CHOICE IN ECONOMICS Viktor Vanberg BEYOND RHETORIC AND REALISM IN ECONOMICS Thomas A.Boylan and Paschal F.O’Gorman FEMINISM, OBJECTIVITY AND ECONOMICS Julie A.Nelson ECONOMIC EVOLUTION Jack J.Vromen ECONOMICS AND REALITY Tony Lawson THE MARKET John O’Neill ECONOMICS AND UTOPIA Geoff Hodgson CRITICAL REALISM IN ECONOMICS Edited by Steve Fleetwood THE NEW ECONOMIC CRITICISM Edited by Martha Woodmansee and Mark Osteen WHAT DO ECONOMISTS KNOW? Edited by Robert F.Garnett, Jr POSTMODERNISM, ECONOMICS AND KNOWLEDGE Edited by Stephen Cullenberg, Jack Amariglio and David F.Ruccio THE VALUES OF ECONOMICS An Aristotelian perspective Irene van Staveren HOW ECONOMICS FORGOT HISTORY The problem of historical specificity in social science Geoffrey M.Hodgson T H E VA L U E S O F E C O N O M I C S An Aristotelian perspective Irene van Staveren London and New York First published 2001 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor and Francis Group This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2001 Irene van Staveren All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Staveren, Irene van. The values of economics: an Aristotelian perspective/Irene van Staveren p. cm.—(Economics as social theory) Includes bibliographical references and index. 1. Economics—Philosophy. 2. Economics—Moral and ethical aspects. 3. Aristotle. I. Title. II. Series. HB72 .S674 2001 330'.01–dc21 00–068430 ISBN (Hbk) 0-415-24182-0 ISBN (Pbk) 0-415-24183-9 ISBN 0-203-12239-9 Master e-book ISBN ISBN 0-203-16342-7 (Adobe eReader Format) CONTENTS List of figures viii List of tables ix Preface x 1 The missing ethical capabilities of rational economic man 1 2 Paradoxes of value 25 3 Liberté, égalité, fraternité 58 4 Beyond the highway of modernist economics 88 5 Hypotheses on economic role combination 108 6 Toward an Aristotelian economics 145 7 Institutional mediation between value domains 174 8 Conclusion 202 Notes 209 Bibliography 221 Index 238 vii FIGURES 2.1 The relations between economic value domains 48 2.2 Some characteristics of economic value domains 57 6.1 The relationship between capabilities and virtues within an economic value domain 154 6.2 Excess and deficiency in value domains 161 7.1 The mediating role of institutions within each value domain 180 viii TABLES 4.1 Dualistic reductionism in neoclassical economics 90 4.2 The classes and the virtues 95 5.1 Time-use in paid and unpaid work for women as a percentage of men 113 6.1 Externalities spilling over from each value domain 164 ix