Arnold Kling is reading The Bourgeois Virtues, by Deirdre McCloskey. So am I. McCloskey's style is a little... frenetic... but the thesis is (for me) too important to miss. It's a combination of the virtue ethics of Alasdair MacIntyre, which I wrote about in my first TCS article, "Did Benedict XVI Take a Page Out of MacIntyre's Book?", with a sort of radical libertarian brand of free-market economics. Free-market economics is generally deliberately amoral, and counts this as a virtue. Parsimonious assumptions are considered a meritorious trait in a theory. Economics tries to do what T.S. Eliot said was impossible: "to design a system so perfect that no one needs to be good." The attempt is fertile but ultimately, I think, unsuccessful, as is indicated when economists are cornered into attributing third-world poverty to "corruption" or "institutions," factors that are rather opaque to economists, and that ordinary people understand by talking about culture and morals. But once you've started assuming amorality, it's hard to break the habit. So many models are populated by rational agents! If we have to admit that there is virtue in the world, and that we need it, where does that leave them?
The solution is to start modeling ethics and its impact on behavior. A little bit of this has been done-- many models assume altruism-- but there's plenty left to do. I'm hoping McCloskey will point the way.