Friday, December 31, 2010

Sewell Chan: Economists consider ethics code

It's about time.  I do think it is a good thing when economists participate in both business and policy--such things inform both teaching and research.  But disclosure is important.  We may all think of ourselves as forthright and objective, but we are in fact shaped by experiences (and as economists never cease to remind us, by our paychecks).  Gary Becker's line in Chan's piece about replicability curing all ethical problems doesn't really hold up, because lots of economic theory has never been or has been inadequately tested against data (George Akerlof does a very good job demonstrating this in his AEA Presidential Address from 2007).

We seem as a profession to have a difficult time dealing with ethics--it makes us squeamish, because mainstream economics often celebrates avarice.  But one of Adam Smith's earth shattering works was called The Theory of Moral Sentiments, so he wasn't squeamish about thinking about such things as all.

I have within this blog from time-to-time disclosed my relationships when such things might matter to what I am writing.   The two most important are with Realtors (when I was a graduate student I worked for the Wisconsin Realtors Association, and I was a consultant on Existing Home Sales in the late 1990s and early 2000s) and with Freddie Mac (where I worked for less than a year and a half in 2002-03).  My center at USC has a large number of donor members.   I have also consulted for the World Bank.  These relationships have been rewarding to me financially and intellectually, and while I like to think I play things straight, I would be foolish to pretend that these experiences have had no influence on my outlook.  I leave it to readers to determine the impact of such influence on the validity of what I write.