Do Economists Need Virtues?

Abstract

In many works Deirdre McCloskey criticizes professional economics for ignoring virtues. Even though I disagree with details of her analysis I concur with her general conclusions. In the paper I sketch my own perspective on how economists could profit from the virtue discourse as developed by Adam Smith. My argument is intended for economists who believe economics is about implications of individual choice. I distinguish behaviorist and mentalist interpretation and criticize the former. We all should be mentalists and admit the existence of the problem of interpretation. I briefly discuss neuroeconomics and evolutionary psychology as theories of interpretation and show that moral psychology can be viewed as one in morally relevant situations. I read Adam Smith’s Theory of Moral Sentiments as an important contribution to the moral psychology. I outline the Smithian system and show what economists can learn from it. They can improve their interpretive skills but also cultivate their general outlook of the world by understanding how knowledge of the market process shapes interpretation of the choice problem. Their general outlook can do better provided that it is balanced with the complete array of virtues. If not it may provide a distorted picture of reality.