The prevalence of the "homo economicus" model of humanity has crowded out considerations of important noneconomic aspects of human nature - most importantly, the moral dimension of human thought and conduct. As a result, our understanding of the present ills besetting the business world and the market economy is incomplete, and the policy prescriptions flowing therefrom are often suboptimal (if not counterproductive).This book review situates "Moral Markets" within this larger debate over human nature generally. I show how, through the presentation of biological evidence and evolutionary theory, "Moral Markets" repudiates the "homo economicus" model of humankind, and supports the Aristotelian position that human beings are fundamentally moral creatures by nature. After demonstrating that free markets cannot thrive in the absence of virtue, "Moral Markets" leaps to the conclusion that free markets must be generally populated by virtuous actors. This book review asks whether another conclusion might be drawn: that the free markets of today lack a critical mass of virtuous actors, hence the current spate of corporate scandals and economic woes.
{"title":"Exposing the Myth of Homo Economicus (Book Review of 'Moral Markets: The Critical Role of Values in the Economy')","authors":"Ronald J. Colombo","doi":"10.2139/ssrn.1189499","DOIUrl":"https://doi.org/10.2139/ssrn.1189499","url":null,"abstract":"The prevalence of the \"homo economicus\" model of humanity has crowded out considerations of important noneconomic aspects of human nature - most importantly, the moral dimension of human thought and conduct. As a result, our understanding of the present ills besetting the business world and the market economy is incomplete, and the policy prescriptions flowing therefrom are often suboptimal (if not counterproductive).This book review situates \"Moral Markets\" within this larger debate over human nature generally. I show how, through the presentation of biological evidence and evolutionary theory, \"Moral Markets\" repudiates the \"homo economicus\" model of humankind, and supports the Aristotelian position that human beings are fundamentally moral creatures by nature. After demonstrating that free markets cannot thrive in the absence of virtue, \"Moral Markets\" leaps to the conclusion that free markets must be generally populated by virtuous actors. This book review asks whether another conclusion might be drawn: that the free markets of today lack a critical mass of virtuous actors, hence the current spate of corporate scandals and economic woes.","PeriodicalId":438601,"journal":{"name":"Hofstra University School of Law Legal Studies Research Paper Series","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133737141","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper assesses the current state of law and economics, standard and behavioral, and proposes an additional element to the basic belief-desire apparatus of economic theory in order to create a more unified theory of behavior. The first part of the paper assesses the current status of standard economic theory. While standard models have had their successes, a large and growing body of empirical evidence reveals that people often fail to live up its rational-actor ideal. In response, economists usually stick with standard consumer theory and attempt to explain the anomalous results by referring to some overlooked input (e.g., some new belief) or by applying the old models in new ways (e.g., multiple-selves accounts). But there are some cases that standard approaches just can't explain, and they don't seem to have the resources needed to expand their explanatory reach. Behavioral economics, the focus of the second part of the paper, is not without problems of its own. Chief among these is that it has not coalesced into a unified theory of behavior. This is problematic because there are inconsistent (and irreconcilable) behavioral explanations for particular bits of behavior; it is also difficult to figure out how behavioral and standard accounts fit together. The root of the problem, though, is not that behavioral models are under-theorized, but that they are under-motivated. Behavioral economists often fail to draw a distinction between empirical evidence and what it is evidence for. This sort of curve fitting approach explains why behavioral explanations are less than satisfying, and also helps explain why behavioral economics has not coalesced into a unified theory. The usual methods for accommodating the empirical evidence regarding economic theory share the following feature: they take the basic economic account as canonical. Accept, reject, or tinker with the functional forms, most economists, standard and behavioral, confine themselves to thinking about the particular elements of common sense (namely, desires and beliefs) that originally inspired economic models. There is, however, another approach. Economic theory (and its successors) might be too distilled - after all, there is much more to our common-sense theory of behavior than the claim that people act to get what they want. Recognizing this possibility allows us to see that we can look for additional resources in common sense to enhance economic models in a top down instead of bottom up way. The third and final part of the paper discusses one such approach based on Frederic Schick's work on understandings. Drawn from the well of common-sense psychology, the concept of understandings presents an additional element to the basic belief-desire apparatus that underlies economic theory. The idea, in a nutshell, is that people normally consider their circumstances from a particular perspective and, as a result, they act on proper subsets of their beliefs and desires that reflect their tak
{"title":"Beyond Tinkering: Economics after Behavioral Economics","authors":"Stephen Ellis, Grant M. Hayden","doi":"10.2139/ssrn.824405","DOIUrl":"https://doi.org/10.2139/ssrn.824405","url":null,"abstract":"This paper assesses the current state of law and economics, standard and behavioral, and proposes an additional element to the basic belief-desire apparatus of economic theory in order to create a more unified theory of behavior. The first part of the paper assesses the current status of standard economic theory. While standard models have had their successes, a large and growing body of empirical evidence reveals that people often fail to live up its rational-actor ideal. In response, economists usually stick with standard consumer theory and attempt to explain the anomalous results by referring to some overlooked input (e.g., some new belief) or by applying the old models in new ways (e.g., multiple-selves accounts). But there are some cases that standard approaches just can't explain, and they don't seem to have the resources needed to expand their explanatory reach. Behavioral economics, the focus of the second part of the paper, is not without problems of its own. Chief among these is that it has not coalesced into a unified theory of behavior. This is problematic because there are inconsistent (and irreconcilable) behavioral explanations for particular bits of behavior; it is also difficult to figure out how behavioral and standard accounts fit together. The root of the problem, though, is not that behavioral models are under-theorized, but that they are under-motivated. Behavioral economists often fail to draw a distinction between empirical evidence and what it is evidence for. This sort of curve fitting approach explains why behavioral explanations are less than satisfying, and also helps explain why behavioral economics has not coalesced into a unified theory. The usual methods for accommodating the empirical evidence regarding economic theory share the following feature: they take the basic economic account as canonical. Accept, reject, or tinker with the functional forms, most economists, standard and behavioral, confine themselves to thinking about the particular elements of common sense (namely, desires and beliefs) that originally inspired economic models. There is, however, another approach. Economic theory (and its successors) might be too distilled - after all, there is much more to our common-sense theory of behavior than the claim that people act to get what they want. Recognizing this possibility allows us to see that we can look for additional resources in common sense to enhance economic models in a top down instead of bottom up way. The third and final part of the paper discusses one such approach based on Frederic Schick's work on understandings. Drawn from the well of common-sense psychology, the concept of understandings presents an additional element to the basic belief-desire apparatus that underlies economic theory. The idea, in a nutshell, is that people normally consider their circumstances from a particular perspective and, as a result, they act on proper subsets of their beliefs and desires that reflect their tak","PeriodicalId":438601,"journal":{"name":"Hofstra University School of Law Legal Studies Research Paper Series","volume":"244 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116798221","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
More than half a century ago, the ABA recognized that a lawyer's duty to disclose fraud on the court is subordinate to the obligation to preserve a client's confidences. Later, the ABA explained that because the lawyer is an officer of the court, she is required to maintain her client's confidences even in cases of client perjury. Thereafter, relying on tradition as well as substantial policy considerations, the ABA held that for a lawyer to disclose her client's fraud on the court was unthinkable. That tradition appeared to have been reversed in 1983, when the ABA adopted Model Rule 3.3 requiring lawyers to take remedial action in cases of known perjury. In some jurisdictions, this has meant that a lawyer must require her client to testify in narrative and then to omit any reference to the client's false testimony in closing argument. In that way, the lawyer effectively communicates the client's guilt to the jury as well as to the judge. However, that appearance of a major policy change from the traditional view has been rendered practically meaningless by the requirement that a lawyer have actual knowledge before taking any remedial action. The result is that a defense lawyer may refrain from concluding that her client's testimony is perjurious, despite the fact that the client has told the lawyer inconsistent versions of the truth, and despite the fact that the client's testimony is preposterous, unsupported by any other evidence, and contradicted by credible evidence. Nevertheless, there remains a critical policy issue under Model Rule 3.3, because there are still some occasions when lawyers conclude that their clients are lying and then betray their clients' confidences. Unfortunately, those lawyers are virtually always court-appointed attorneys representing criminal defendants who are poor and members of minority groups. This has produced a race- and class-based double standard, resulting in a de facto denial of equal protection of the laws. Moreover, no court has ever considered the point that Model Rule 3.3 violates the Fifth and Sixth Amendments to the Constitution. The Supreme Court has held that the Sixth Amendment forbids an agent of the state to pose as a pretended friend of the client, to elicit unwarned admissions from the defendant, and then to reveal those admissions at trial. Nevertheless, that is what happens under Model Rule 3.3. The lawyer is required, on pain of professional discipline by the state, to deliberately elicit incriminating information from the client; at the same time, the lawyer is forbidden by the state to warn the client in advance that, if the client should testify falsely, the lawyer will reveal the client's confidences during the trial. Ironically, therefore, the Sixth Amendment guarantees the defendant the right to rely on counsel to advise him about his Fifth Amendment privilege before he incriminates himself, but there is no one to advise the defendant about his Fifth Amendment privilege before he is tr
{"title":"Disclosing the Truth about Client Perjury","authors":"M. Freedman","doi":"10.2139/SSRN.979654","DOIUrl":"https://doi.org/10.2139/SSRN.979654","url":null,"abstract":"More than half a century ago, the ABA recognized that a lawyer's duty to disclose fraud on the court is subordinate to the obligation to preserve a client's confidences. Later, the ABA explained that because the lawyer is an officer of the court, she is required to maintain her client's confidences even in cases of client perjury. Thereafter, relying on tradition as well as substantial policy considerations, the ABA held that for a lawyer to disclose her client's fraud on the court was unthinkable. That tradition appeared to have been reversed in 1983, when the ABA adopted Model Rule 3.3 requiring lawyers to take remedial action in cases of known perjury. In some jurisdictions, this has meant that a lawyer must require her client to testify in narrative and then to omit any reference to the client's false testimony in closing argument. In that way, the lawyer effectively communicates the client's guilt to the jury as well as to the judge. However, that appearance of a major policy change from the traditional view has been rendered practically meaningless by the requirement that a lawyer have actual knowledge before taking any remedial action. The result is that a defense lawyer may refrain from concluding that her client's testimony is perjurious, despite the fact that the client has told the lawyer inconsistent versions of the truth, and despite the fact that the client's testimony is preposterous, unsupported by any other evidence, and contradicted by credible evidence. Nevertheless, there remains a critical policy issue under Model Rule 3.3, because there are still some occasions when lawyers conclude that their clients are lying and then betray their clients' confidences. Unfortunately, those lawyers are virtually always court-appointed attorneys representing criminal defendants who are poor and members of minority groups. This has produced a race- and class-based double standard, resulting in a de facto denial of equal protection of the laws. Moreover, no court has ever considered the point that Model Rule 3.3 violates the Fifth and Sixth Amendments to the Constitution. The Supreme Court has held that the Sixth Amendment forbids an agent of the state to pose as a pretended friend of the client, to elicit unwarned admissions from the defendant, and then to reveal those admissions at trial. Nevertheless, that is what happens under Model Rule 3.3. The lawyer is required, on pain of professional discipline by the state, to deliberately elicit incriminating information from the client; at the same time, the lawyer is forbidden by the state to warn the client in advance that, if the client should testify falsely, the lawyer will reveal the client's confidences during the trial. Ironically, therefore, the Sixth Amendment guarantees the defendant the right to rely on counsel to advise him about his Fifth Amendment privilege before he incriminates himself, but there is no one to advise the defendant about his Fifth Amendment privilege before he is tr","PeriodicalId":438601,"journal":{"name":"Hofstra University School of Law Legal Studies Research Paper Series","volume":"2005 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127640638","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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