3. On the possibility of building a theory of social ethics

A significant number of scientists still consider that it is not possible to conceive an objective theory of justice and moral principles. The development of this opinion has been strongly influenced by the evolution of scientistic economics which, obsessed by the maximization criterion, considers that, not only are the ends and means of each actor subjective, but that moral principles of behavior also depend on the subjective autonomy of each decision-maker. If, under any circumstance, an ad hoc decision may be made on the basis of a pure cost-benefit analysis, the existence of morality understood as a scheme containing previously fixed behavior guidelines is not necessary, meaning that any such scheme becomes completely blurred and may be considered to be limited to the particular scope of the subjective autonomy of each individual. Against this position, which has been prevalent to date, it should be consider that one thing is for valuations, utilities and costs to be subjective, as is correctly shown by economic science, and a completely different thing is for no objectively-valid moral principles to exist.(4)

Furthermore, the development of a whole scientific theory on the moral principles which should guide human behavior in social interaction is not only advisable, but also entirely possible. In fact, over recent years, several very significant works in this field have appeared. Among them, Israel M. Kirzner’s contribution suggesting a revised concept of distributive justice in capitalism should be highlighted. Attention should be drawn to the fact that this contribution has been developed by one of the most distinguished theorists of the Austrian School of Economics, which shows that the field of correctly developed economic theory is significantly interrelated to that of social ethics. The fact is that economic science, even if it is wertfrei or free of value judgements, is not only able to help to adopt clearer ethical positions but can, furthermore, as Kirzner illustrates, make logical-deductive reasoning easier and surer in the social ethics field, avoiding the many errors and dangers that do arise from the traditional static analysis of economic theory built under the unreal assumption of complete information (5). Furthermore, according to this conception, the considerations on “efficiency and “justice”, far from being a trade-off which would allow different combinations in varying proportions, would appear to be two sides of the same coin. In effect, from our point of view, only justice leads to efficiency; and, vice versa, what is efficient cannot be unjust. Thus, both considerations, those relative to moral principles and those on economic efficiency, far from being in opposition to each other, mutually strengthen and support each other.(6) One of the approaches that most clearly shows this key interrelationship is developed by Israel M. Kirzner in his book, the essential content of which will be analyzed below.



Jesús Huerta de Soto
Professor of Political Economy
King Juan Carlos University of Madrid, Spain

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(4).”Economics does currently inform us, not that moral principles are subjective, but that utilities and costs are indeed subjective” (Rothbard 1982, 202).

(5).Economic theory alone is not, however, considered able to determine moral issues and, therefore, there are no grounds for the Roland Kley’s (1994, 228, footnote 9) recent criticism of Kirzner.

(6).Therefore, the trade-off would exist, at most, between one binomial constituted by what is just and efficient and another arising from an inefficient and unjust action (in which the free practice of entrepreneurship is systematically coerced and the total appropriation of the results of human creativity is prevented). In addition, the efficiency arising from the immoral systematic coercion that the State exercizes over the economy is very different to that which the neoclassical economists think they identify within the static paradigm of the so-called “welfare economics”. Effectively, for these economists, measures of institutional coercion (for example, the forced redistribution of income) give rise, at most, to effects of distortion that distance the economic system from the points of the maximum production possibilities curve of the economy, without realizing that the damaged caused by these measures is much deeper, since they dynamically prevent the entrepreneurs from coordinating and discovering new opportunities for gain and continually move the society’s production possibilities curve towards the right.