The Ethical Foundations of Economics.

• Author: Gallaway, Terrel

In this book, Piderit explores the natural law tradition and its potential economic ramifications. In particular, he posits several fundamental values and ethical principles and traces their implications for the economy and for neoclassical theory.

In the first part of the book, Piderit surveys both ethics and economics. He compares and contrasts different schools of thought within both fields and discusses the methodologies used in the two disciplines. Here, he offers an explanation of why he chose to focus on natural law ethics and neoclassical economics - citing the former's broad acceptance in the Judeo-Christian world and the latter's domination of current economic thought.

In chapters three and four, the author offers a list of seven fundamental values - knowledge, beauty, life, friendship, playfulness, practical reasonableness, and religion or wonderment - and places them in context in a world full of many value systems and traditions. His goal here is not so much to convince readers of the absolute verity of this list as it is to establish its plausibility.

Building on these fundamental values, the author proceeds, in the next two chapters, to develop six social principles of justice. These principles apply to a society's institutions and establish rules by which activities within a society should be directed and coordinated. Piderit derives these principles by tracing out the institutional implications of a commitment to the fundamental values coupled with a realization of the connectedness of individuals. Institutions are just, Piderit argues, if they are in keeping with these principles.

In chapters seven and eight the author uses his social principles of justice and neoclassical economic theory to evaluate the institutions of a market economy. Profit-maximizing behavior receives cautious approval because it promotes the principle of efficiency. Utility maximization is rejected because the neoclassical conception of hedonistic self interest is irreconcilable with the pursuit of fundamental values and the principles of justice. On the other...