Maybe studying economics doesn’t morally corrupt you after all

So say Hummel, Pfaff, and Rost, in a recent paper:

In view of the numerous accounting and corporate scandals associated with various forms of moral misconduct and the recent financial crisis, economics and business programs are often accused of actively contributing to the amoral decision making of their graduates. It is argued that theories and ideas taught at universities engender moral misbehavior among some managers, as these theories mainly focus on the primacy of profit-maximization and typically neglect the ethical and moral dimensions of decision making. To investigate this criticism, two overlapping effects must be disentangled: the self-selection effect and the treatment effect. Drawing on the concept of moral judgment competence, we empirically examine this question with a sample of 1773 bachelor’s and 501 master’s students. Our results reveal that there is neither a self-selection nor a treatment effect for economics and business studies. Moreover, our results indicate that—regardless of the course of studies—university education in general does not seem to foster students’ moral development.

For the pointer, I thank a lost, forgotten soldier in my Twitter feed.


'Maybe studying economics doesn’t morally corrupt you after all'

One hopes not - Alexander Van der Bellen, the new president of Austria is an economist, after all.

'In 1962, he graduated from the Akademisches Gymnasium in Innsbruck. He studied economics at the University of Innsbruck and received a doctorate in 1970. From 1968 to 1970 he worked as assistant at the Institut für Finanzwissenschaft of the University of Innsbruck, and from 1972 to 1974 at the Internationales Institut für Management und Verwaltung in Berlin. He achieved habilitation in 1975.

In 1976 he was appointed associate professor at the University of Innsbruck. In 1980, he became professor of economics at the University of Vienna. Subsequently, he took over the chair for economics there. From 1990 to 1994 he was dean of the faculty for social sciences and economics at the University of Vienna.

A former member of the Austrian Social Democratic Party, Van der Bellen became Member of the National Council of Austria (Nationalrat) for the Austrian Green Party in 1994. On 13 December 1997 he became their federal spokesperson, and in 1999 chairman of the parliamentary club of the Greens in the National Council. He resigned after the September 2008 election, when the Greens lost votes for the first time in a decade. In 2010 he became Commissioner of the City of Vienna for Universities and Research, and in 2012 he left Parliament and joined the Vienna City Council.

Van der Bellen is strongly supportive of the European Union, and advocated European federalism in a 2015 book.

In all popularity rankings, Van der Bellen has always scored much higher than the political party he represents.'

Boring (but it will be interesting if FPO wins the next parliamentary election and the old lefty gets to eat his words and swear in an FPO-led government).

The Austrian president has vast powers (don't believe in the silly talk of "ceremonial" - the Austrian presidency only is "ceremonial" because there is an implicit agreement between social-democrats and conservatives to not use the presidential powers), and can do many things to block a potential government that he dislikes.

I am reminded of Watt's description of Molotov:

"He was ignorant, stupid, greedy and grasping, incurably suspicious and immovably obstinate. Like many stupid men he was cranky, pedantic even, and a bit of a bully in a coarse, peasant way."

‘Maybe studying economics doesn’t morally corrupt you after all’

Whistling through the graveyard at midnight.

Hilarious. Forbidden knowledge. I submit 'carlospin' as an examplar of how modern secular liberalism is actually a religion.

Alternatively, there was some unseen reward for pretending to be non-sociopathic and all the economics students they tested were sufficiently cunning to fake it?

Moreover, our results indicate that—regardless of the course of studies—university education in general does not seem to foster students’ moral development.

That is not a surprise.

Doesnt surprise me, this hypothesis is ridiculous. Power corrupts though. And if they think they can get away with it....well...

"actively contributing to the amoral decision making of their graduates": I've never suggested any such thing. It's their immoral decision-making I object to.

If so, this assumes that thirty to forty years ago business and economics education fostered immorality. The executives, directors, and managers responsible for the recent (2004 to 2008) accounting scandals and economic crises mainly were educated in the 1960's through 1980's.

Morality, in general, is passe. The only "evil" most people recognize is illness/death; and not being, getting, having what we want, or think we are.

The university once was "alma mater": "mother of the soul." Not so much any more. More notes from the education apocalypse.

I see additional (to amorality) causes for all this pomp and circumstances. Among which are underestimating and not controlling risks; myth/superstition that real estate prices always rise, despite several (localized) busts as recently as the early 1990's; boards of directors (I don't like CEO's also serving as board chairmen) failures to enforce effective controls, especially allowing compensation based on performance which gives employees incentives to skirt morals and become "bad actors;" etc.

Around about 35 years ago, I had a conversation with a friend of my father's about the then novel practice of incorporating ethics courses into business school curricula. This man, with more than 20 years in the advertising business under his belt, thought the whole thing a hoot. "You know it when you're ten, or you don't know it'. That man was born in 1931 and died in 2005. The farther we get from the world he and his contemporaries built, the stupider we seem to get.

For about three-quarters of the population, "business," "profit," "commerce," and "employer" all denote evil. See the pronouncements of the Pope. An amoral education should be considered a step up. And really economists like Tyler and Alex should be recognized as heroes of ethical education. By making Marginal Revolution University courses available for free as well as providing this excellent web site and discussion forum they have greatly enriched countless lives.

For about three-quarters of the population, “business,” “profit,” “commerce,” and “employer” all denote evil. -

No, for about 3/4 of the Movie TV writers in Hollywood. Perhaps because production studios are run by men who are very corrupt.

"By making Marginal Revolution University courses available for free as well as providing this excellent web site and discussion forum they have greatly enriched countless lives" [SNIP] or:


Frank's pioneering work shows unfair splitting in ultimatum games for economic students.

It might not be the best test for general morality.

Possibly, studying economics mages you be more "rational" in some limited contexts, but this is a far cry from the generalised (sensational) claim of losing mortality generally.....

I always had a weird intuitive feeling with this Frank study. But now I feel vindicated

I took a Legal Ethics course in law school. Focusing on "black letter law"--this is good, that is bad--would have bored the teacher so it was all about the hard cases, where you could argue back and forth. The unintended result was that legal ethics seemed a game, that as long as you could make an argument for something, it was okay.

Allan Bloom once wrote that he had never been witness to an argument regarding abortion under the aegis of an academic philosophy department not meant to legitimate the practice. That tells us more than we'd want to know about philosophers who specialise in ethics.

"university education in general does not seem to foster students’ moral development."

This has to be juxtaposed against another data point. Even some college, without earning a degree, reduces your change of being incarcerated by something on the order of a factor of sixty. Only about 1% of prison inmates have even some college compared to about 60% of the general population.

In starting to study economics, I found that a lot of neoliberal orthodoxy in early econ courses was very conducive to certain sorts of thinking. Which many consider to be "amoral" in a sense. But when you're in a field responsible for doing all the math and stats to drive political decisions about who gets what, incentives, and all that, I think teaching people that "amoral" is the correct approach, well, I think that is wrong. Economists should be encouraged to use their moral reasoning, but at the same time prioritize honesty in methods and be clear about how their moral reasoning may be influencing their portrayals, what drives their views of human nature (increasingly possible to introduce more rigorous evidence, despite many problems in replication) which legitimize theoretical constructs, etc.

Anyways, concerned about this situation, wondering how it might be forming me (not that I'm opposed to changing views, but I'd rather be more aware of the ways in which it might come to pass so I can be more intentional and rational about things), I looked up some research on this.

The evidence I found is that in "dictator games" where one player has a sum of money, dictates the distribution, and the other play either accepts or rejects. If the second player rejects, both get nothing. Economics majors were found to propose the lowest amount of money compared to all other majors, often having the partner reject the highly unequal proposal. You can draw your own conclusions about what that means about morals.

It was immediately obvious to me that there was some self selection going on. But there's another issue. Economics students study game theory. Also it wasn't a real life situation. It was a one-off game with no social repercussions. So if you've studied game theory, you're trained to think "he'll take any proposal as long as it's not zero", and correct for the fact that $0.01 is too close to zero, "too unfair", and offer, say 10-20% of the pie (which quite a lot of people will still reject).

In fact, I find a lot of economists to fall into camps of "you know what's best for you, I won't interfere" AND/or "there are imperfections so we should try to help you" ... with not actually that many wanting "draconian" policies (although many are favourable to nudges). Maybe not always the most socially apt people at the bar, but in academic debate generally quite open to debate, and don't get angry when people disagree with them (unless their training dictates that they should know better and there's a completely retarded debate going on ...). But I think the experimental economics evidence on economics majors being greedy hoarders who would take it all if they could is not at all accurate. They just know what game theory is, and when there's $20 on the table in a one-off game with no social repercussions, they prefer $17 to $10. After all, society does not hang in the balance, but the difference will buy Chinese takeaway tonight.

Short: there is evidence that studying economics might corrupt you. But the actual problem is that behavioural economics experiments do not accurately reflect the real world.

Comments for this post are closed