November-December 2003 > John Harvard's Journal

Economics and Moral Questions

Last fall, President Lawrence H. Summers spoke at the first Morning Prayers service of the semester at Memorial Church. His controversial comments on anti-Semitism (see "Raised Voices," November-December 2002, page 52) resonated in news accounts for months after.

Returning to the pulpit in Appleton Chapel this year, as classes resumed on September 15, Summers chose to speak in his second capacity, as professor of economics. The former U.S. Secretary of the Treasury, advocate of economic openness (see "Globalization Defended," July-August 2003), and proponent of Harvard’s international presence in education and research, he did so at a fraught moment. The latest round of world trade-liberalization talks had collapsed the day before. An hour after Morning Prayers, Summers met in his Massachusetts Hall office with His Holiness the Dalai Lama, who concluded a visit to Boston by spending the day at Harvard. And in common with other faculty members, the president was preparing for class, where he would debate some of the issues directly with students in Freshman Seminar 47t, his course on "Globalization: Opportunities and Challenges."

Excerpts from his remarks follow.

East meets West: His Holiness the Dalai Lama and President Lawrence H. Summers at Massachusetts Hall

Photograph by Justin Ide / Harvard News Office

 

Some of you may recall that one year ago…I spoke at Morning Prayers on the topic of anti-Semitism. Whatever their merits, I think it fair to say that my observations did not go unnoticed. I hope my remarks today will be cause for reflection but trust that that reflection will be rather more private and local than followed my remarks last year.

I want to reflect this morning on what the discipline that I am trained in—economics—can contribute to thinking about moral questions. Economics provides just one perspective, but one that I think is too rarely appreciated for its moral as well as practical significance.

Indeed, it is fair to say that economists like me rarely appear in places like this. Just why is not altogether clear. But when it comes to preaching economists, it strikes me that there is both a lack of demand and a lack of supply. A lack of demand because so many believe that any economic way of thinking is one that "knows the price of everything and the value of nothing." A lack of supply because many economists are instinctively uncomfortable with moral, let alone spiritual, discourse.

And yet, it seems to me there are some aspects of characteristic economic modes of reasoning that complement other modes of moral thought. One important thing that is distinctive about the way economists approach the world is their great emphasis on respect for individuals—and the needs, tastes, choices, and judgment they make for themselves. It is the basis of much economic analysis that the good is an aggregation of many individuals’ assessments of their own well-being, and not something that can be assessed apart from individual judgments on the basis of some overarching or separate theory.

I was reminded of these issues as I had a chance over the weekend to engage with many students at the freshman barbecues on issues of moral concern to all of us. For example, many believe that it is wrong to buy imported products produced by workers who are paid less than a specified minimum wage of some sort. We all deplore the conditions in which so many on this planet work and the paltry compensation they receive. And yet there is surely some moral force to the concern that as long as the workers are voluntarily employed, they have chosen to work because they are working to their best alternative. Is narrowing an individual’s set of choices an act of respect, of charity, even of concern? From this perspective the morality of restrictions on imports or boycotts advocated by many is less than entirely transparent.

In a similar vein, it is often suggested that the marketization or Westernization of indigenous cultures is doing great damage. And surely in some cases it is. But here too, the individual-based perspective may help us to see a different side of the moral question—for an economist would attend first to those directly affected rather than to the judgments of those who are new to the situation. It disturbs the sensibilities of many of us to imagine the TV show Survivor being beamed to satellite dishes in rural villages or the pervasiveness of the Nike symbol, but if that is what people want, we need to be cautious about opposing their having it.

There is another observation that is closely related. There is much that is wrong with the market, but one of the things that most bothers many people of faith about market mechanisms is the idea that there is something wrong with a system where we are able to buy bread only because of the greed or profit motive of the people who make the bread. Here I would be very cautious. We all have only so much altruism in us. Economists like me think of altruism as a valuable and rare good that needs conserving. Far better to conserve it by designing a system in which people’s wants will be satisfied by individuals being selfish, and saving that altruism for our families, our friends, and the many social problems in this world that markets cannot solve. This is not just an abstraction—the far larger degree of private charity in this country than in Western Europe, and in Western Europe than in the socialist economies, is worth some reflection—especially in institutions like this one that are made possible by acts of private altruism.

There is much to argue with what I have said. But I will have served my purpose if I have suggested that many of the viewpoints that are dismissed as selfish or "just economic" are motivated not by an unwillingness to grapple with moral issues but with an insistence that often the highest morality is respecting the choices and views of people whom we all want to help.

And I hope also to have demonstrated in some tiny way, on this first day of classes, what we at Harvard are all about—the continual search to come closer and closer to veritas through the juxtaposition and consideration of very different perspectives.