On the Need for Professional Economic Ethics: The Epistemic Paradox

Economics faces an epistemic paradox. On the one hand, economists know more than lay people about economic theory and policy. This “epistemic asymmetry” gives economists and the economics profession substantial authority over matters that are vital to social welfare. On the other hand, economists cannot know enough. Economists face the problem of “epistemic insufficiency”—a fact that prominent economists recognized only in the aftermath of the financial crisis of 2008. There are severe limits to what economists know today and what they might ever be able to know. The epistemic paradox implies that even the most accomplished and virtuous economists can and do cause substantial harm as they try to do good.

 The epistemic paradox places economists on ethically fraught terrain as they undertake their professional practice—whether that practice entails teaching, academic research, or applied work (including non-academic economic consulting and policy analysis). For the profession, recognition of the epistemic paradox would seem to require much greater attention to the limits to economic knowledge, and to the ways that these limits ought to influence economists’ behavior. The risk to the profession of attending to the paradox is diminished influence and authority in the policy domain.