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Ethics and the economics of Adam Smith and J.S. Mill: On the moral significance of classical economics.

Witztum, Amos (1992) Ethics and the economics of Adam Smith and J.S. Mill: On the moral significance of classical economics. PhD thesis, London School of Economics and Political Science (United Kingdom).

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Abstract

This work examines some of the effects that developments in economic theory might have had on concepts of economic justice that are associated with it. Classical economics, as represented by Adam Smith and J.S. Mill is a good example of models of general equilibrium where moral responsibility cannot be evaded. Indeed, in the ethical analysis of these models- conducted by the same people who suggested them- the role of desert was prominent. Contrary to the general belief that classical economists advocated natural liberty for its moral goodness as much as for its economic efficiency, analysis by desert reveals a serious moral inadequacy of natural liberty. This, in turn, may explain the discrepancy between the received view and the fact that the works of classical economists are sometimes full with moral apprehensions about natural liberty. To reach such conclusions there is a need to re-interpret the works of Smith and Mill at both levels of economics and ethics. The bulk of this work is devoted to that purpose. A new interpretation of Smith's ethics is being offered. It is based on the consistency of human character and on the existence of some 'rationalistic' considerations in his work. Such an interpretation offers an alternative (and more comprehensive) solution to what became to be known as the Adam Smith's problem (old and new). Also, the application of his moral theory to the analysis of actions implies that a correlation must exist between intention and consequences. Thus the moral significance of the proposed spill-over of beneficence derived from the 'invisible hand' mechanism, is questioned. A new interpretation of Smith's economic follows where 'pre-market demand' relates the capitalists' decisions on saving to equilibrium prices. A distinction that has a moral significance is then being drawn between 'market-price' and 'natural price'. The study of Mill's methodology serves as a foundation to interpret some apparent contradictions in his moral theory (the relationship between Utilitarianism and Liberty). Ethology, which is the theory of character formation plays a major role in it. Coupled with Mill's theories of Free-will and Individuality, it is possible to establish a solution to the problems of Utilitarianism and Liberty without expanding the concept of utility. Similar principles are then introduced to Mill's discussion of economic justice. The principle of individuality is being presented in the form of Mill's principle of 'proportional remuneration'. A discussion of his theories of property follows and then, the question of the meaning of 'proportional remuneration' is being put forward. Before, however, an exposition of Mill's economic model in the framework of 'cost of production' general equilibrium is being offered. Then, the principle of proportional remuneration is being investigated. It is also related to a much wider question of the role and meaning of the labour theory of value in classical economics. (Abstract shortened by UMI.).

Item Type: Thesis (PhD)
Uncontrolled Keywords: Economics, General
Sets: Collections > ProQuest Etheses
URI: http://etheses.lse.ac.uk/id/eprint/1325

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