 Normative Ethics

Normative ethics is interested in determining the content of our moral behavior.

Normative ethical theories seek to provide action-guides; procedures for answering the
Practical Question ("What ought I to do?"). The moral theories of Kant and Bentham are
examples of normative theories that seek to provide guidelines for determining a specific
course of moral action. Think of the Categorical Imperative in the case of the former and
the Principle of Utility in the case of the latter.
Example:

 Do unto others as you would have them do unto you. (Golden Rule)
 Act as if the maxim of your action was to become through your will a universal law of
nature. (Kant's Categorical Imperative)
 That which wills is the Good.

Metaethics Ethics

talks about the nature of ethics and moral reasoning. Discussions about whether ethics is
relative and whether we always act from self-interest are examples of meta-ethical discussions.
In fact, drawing the conceptual distinction between Metaethics, Normative Ethics, and Applied
Ethics is itself a "metaethical analysis

 "What is goodness?" and "How can we tell what is good from what is bad?
 How, if at all, do we know what is right and wrong?

 How do moral attitudes motivate action?

 Are there objective or absolute values?
 What is the source of our values?
 Is it possible to justify our ethical judgments?

Applied Ethics

Applied ethics is one of the three divisions of the philosophy of ethics. Normative
ethics attempts to develop a framework by which actions can be judged ethical or
 not. Metaethics is a discussion about ethics; it attempts to define terms, determine the
authority of right and wrong, and investigate why people feel the inclination to be ethical.
Applied ethics takes these two branches and uses them to definitively state the morality of
specific actions. For an issue to be considered by applied ethics it must be moral, as
opposed to cultural, and controversial.

Animal Ethics: For example: Is it permissible to eat meat?2

 Biomedical Ethics: For example: On whom are we allowed to perform medical tests?3
 Business Ethics: For example: Do corporations have moral status?4
 Environmental Ethics: For example: Ought we curb climate change for the sake of future
generations?5
 Information Ethics: For example: May I pirate music?6
 Law: For example: Should personal, recreational drug use be illegal?7
 Philosophy of the Family: For example: What do children owe their parents?8
 Practical Distributive Justice: For example: To what extent ought we give to charity?9
 Procreative Ethics: For example: Is it permissible to abort a fetus?10
 Sexual Ethics: For example: Should prostitution be legal?11

BRANCHES OF ECONOMICS

Economics is a broad subject concerned with the optimal distribution of resources in society.
Within the subject there are several different branches which focus on different aspects. Also,
there are different schools of thought which generally have different views on aspects of
economics.

The first way to split economics is Microeconomics and macroeconomics.

 Microeconomics – concerned with individual markets and small aspects of the economy.
 Macroeconomics – concerned with the whole aggregate economy. Issues such as inflation,
economic growth and trade.

Branches of economics

1. Classical economics

Classical economics is often considered the foundation of modern economics. It was developed
by Adam Smith, David Ricardo, . Classical economics is based on
 Operation of free markets. How the invisible hand and market mechanism can enable an
efficient allocation of resources

 Classical economics suggests that generally economies work most efficiently when government
intervention is minimal and concerned with the protection of private property, promotion of free
trade and limited government spending.
 Classical economics does recognise that a government is needed for providing public goods,
such as defence, law and order and education.

2. Neo-classical economics

Key people: Leon Walrus, William Jevons, John Hicks, George Stigler and Alfred Marshall

Neo-classical economics built on the foundations of free-market based classical economics. It

included new ideas such as

 Utility maximisation.
 Rational choice theory
 Marginal analysis. How individuals will make decisions at the margin – choosing the best option
given marginal cost and benefit.

Neo-classical economics is often considered to be orthodox economics. It is the economics

taught in most text-books as the starting point for economics teaching. The tools of neo-
classical economics (supply and demand, rational choice, utility maximisation) can be used in
new fields and also for critiques.

Keynesian economics

Key people: John Maynard Keynes

Keynesian economics was developed in the 1930s against a backdrop of the Great Depression.
The existing economic orthodoxy was at a loss to explain the persistent economic depression
and mass unemployment. Keynes suggested that markets failed to clear for many reasons (e.g.
paradox of thrift, negative multiplier, low confidence). Therefore, Keynes advocated government
intervention to kick-start the economy.

Keynesian economics is credited with creating macroeconomics as a distinct study. Keynes

argued that the aggregate economy may operate in very different ways to individual markets
and different rules and policies were needed.

Keynes didn’t reject all elements of neo-classical economics but felt new ideas were needed for
the macro-economy – especially with the economy in recession.

 Keynesian economics

Monetarist economics

Key people: Milton Friedman, Anna Schwartz.

Monetarism was partly a reaction to the dominance of Keynesian economics in the post-war
period. Monetarists, led by Milton Friedman argued that Keynesian fiscal policy was much less
 effective than Keynesians suggested. Monetarists promoted previous classical ideals, such as
belief in the efficiency of markets. They also placed emphasis on the control of the money
supply as a way to control inflation.

Monetarist economics became influential in the 1970s and 1980s, in a period of high inflation –
which appeared to illustrate the breakdown of the post-war consensus

 Monetarism

Austrian economics

Key people: Ludwig Von Mises, Carl Menger

This is another school of economics that was critical of state intervention, price controls. It is
broadly free-market. However, it criticised elements of classical school – placing greater
emphasis on the individual value and actions of an individual. For example, Austrian economists
argue the value of a good reflects the marginal utility of the good – rather than the labour inputs.

 Austrian economics

Marxist economics

Key people: Karl Marx

Emphasises unequal and unstable nature of capitalism. Seeks radically different approach to
basic economic questions. Rather than relying on free-market advocate state intervention in
ownership, planning and distribution of resources.

Neo-liberalism/Neo-classical

A modern interpretation of classical economics. Considerable overlap with monetarism.

Essentially concerned with the promotion of free-markets, competition, free trade, privatisation,
lower government involvement, but some minimal state intervention in public services like health
and education. Few identify as ‘neo-liberal’ – sometimes used as a term of abuse.

 Neoliberalism | Related terms: Washington Consensus

Methodologies of Economics

The distinction between positive economics and normative economics may seem simple, but it
is not always easy to differentiate between the two. Positive economics is objective and fact
based, while normative economics is subjective and value based. Positive economic statements
must be able to be tested and proved or disproved. Normative economic statements are opinion
based, so they cannot be proved or disproved. In fact, many widely accepted statements that
people hold as fact are actually value based.
Example of Positive Economics vs Normative Economics

For example, the statement, "government should provide basic healthcare to all citizens" is a
normative economic statement. There is no way to prove whether government "should" provide
healthcare; this statement is based on opinions about the role of government in individuals'
lives, the importance of healthcare, and who should pay for it.

The statement, "government-provided healthcare increases public expenditures" is a positive

economic statement, as it can be proved or disproved by examining healthcare spending data in
countries like Canada and Britain, where the government provides healthcare.

Relation of economics to other fields of science

Anthropology

Anthropology concerns individual cultures in a society, rather than the society as a whole.
Traditionally, it focuses on what might be termed “primitive” cultures, such as the Yanomamo
people of the South American jungle, who live much the same way they did hundreds of years
ago. Anthropologists place special emphasis on language, kinship patterns, and cultural
artifacts.

Political Science

Political science concerns the governments of various societies. It considers what kind of
government a society has, how it formed, and how individuals attain positions of power within a
particular government. Political science also concerns the relation of people in a society to
whatever form of government they have.

Psychology

Psychology takes the individual out of his or her social circumstances and examines the mental
processes that occur within that person. Psychologists study the human brain and how it
functions, considering issues such as memory, dreams, learning, and perception.
Economics

Economics focuses on the production and distribution of society’s goods and services.
Economists study why a society chooses to produce what it does, how money is exchanged,
and how people interact and cooperate to produce goods.

Scientific Methods of Economics