“Are Economists Basically Immoral?” and Other Essays on Economics, Ethics, and Religion

From PJ Hill's review

Heyne’s perspective is especially important because of his unique background in both ethics and economics. He was an excellent economist, but his Ph.D. was from the University of Chicago Divinity School, and he continued to read widely in ethics, political economy, and theology throughout his lifetime. Thus, his writings are particularly effective in using his understanding to explain economics to ethicists, especially to Christian theologians.

Because Heyne believed that the positive-normative distinction that many economists make is false and that economics is profoundly normative at its very base, his essays can thoughtfully engage those who criticize the ethics of economics on their own grounds. Heyne draws a distinction between personal relationships and the impersonal workings of the market. He argues that most ethicists, with their focus on the actors’ intentions, fail to understand the impersonal nature of markets and the positive outcomes that result when people pursue their own objectives with little knowledge of others’ goals. The failure to understand the distinction between the personal and the impersonal keeps most ethicists from understanding how markets work and how a social-coordination system based on private-property rights and prices is both morally defensible and socially useful. In fact, in the world of impersonal market relationships, if everyone focused on the needs of others, the results would be disastrous: the system would “come to a halt, at enormous cost to all participants if they were to act consistently on the principle of advancing the welfare of the most needy or most worthy—rather than focusing on the accomplishment of their own personal goals” (p. 33).

Justice is nevertheless important, and Heyne developed a well-articulated standard of justice for the world of impersonal markets. Rule-coordinated behavior enables social cooperation to occur among people who do not know each other well, and the rules that work the best in this situation are “clearly defined and readily exchangeable property rights” (p. 178). Efforts to replace the rule of law with direct government intervention usually produce injustice. “The justice or injustice of a social system will not be found in the pattern of outcomes it yields—its end states—but in the procedures through which those outcomes emerge. This is simply the only kind of justice of which social systems are capable” (p.182).

A defense of markets and private-property rights must also deal with the Homo economicus assumption that economists use in explaining and defending the workings of the social-coordination process. Most ethicists and some economists believe that the basic model of analysis assumes that people act only from selfish and hence immoral motives. Heyne strongly disagreed, arguing that the operating assumption is one of purposive, not selfish, action.


In that system of social interaction we call a market economy, decision makers focus their attention on changing money prices. Their motives in doing so are infinitely varied and complex, and are no more likely to be selfish or otherwise morally objectionable than the motives of people at a church picnic or university lecture. The principle consequences of their behavior is ongoing mutual accommodation among millions of people who do not even know of one another’s existence, but who are nonetheless dependent on one another for the basic necessities of life as well as the innumerable luxuries to which they have become accustomed (p. 41).

Although economists focus on monetary measures of value, they do so because explaining how exchange works lies at the heart of their discipline, and the use of money greatly facilitates exchange. In making this argument, Heyne is also contesting another common assumption of economics—that the discipline is defined by its assumption of scarcity. He does not dispute that scarcity drives economizing behavior, but the interesting result is the process of exchange. In the right institutional framework, dealings across space and time occur, and people who know little or nothing about each other focus their attention on activities that work to the advantage of those unknown others.

Even though Heyne rigorously defended both markets and the economic way of thinking from most of the charges leveled against them, he believed that people should take seriously one cogent moral criticism of commercial society. Economists focus on the world of impersonal exchange, but it does not follow that the world of personal relationships is unimportant. Market dealings may give rise to the depersonalization of social relationships. Because of the ease of exit from social relationships that do not please us in our modern, price-coordinated world, our choices may cause us to move away from “those face-to-face institutions in which individuals are socialized and values are nurtured” (p. 77). This argument is not, in Heyne’s view, a reason for greater government intervention in the economy; in fact, most government actions only exacerbate the problem of maintaining social capital.